I Missed $4,500 on ARM. Then I Bought It Back at $292.

 

After getting assigned at $265 and watching ARM run toward $310, I had a decision to make: chase the stock, walk away, or wait for another entry. On September 29, I stepped back in at $292.20 — and immediately sold another covered call.

My last ARM trade gave me one of the clearest lessons I've had from selling covered calls.

I owned 100 shares at $262.40. I sold calls against them, collected premium, and eventually had the shares called away at $265.

Then ARM ran toward $310.

That meant I missed roughly $4,500 of additional upside on those 100 shares after assignment.

It would have been easy to respond emotionally and buy ARM back near the top.

I didn't.

On September 29, I finally re-entered.

100 shares at $292.20.

And almost immediately, I went back to the strategy that had just taught me an expensive lesson.

I sold another covered call.

$29,220 Back Into ARM

My new ARM position started with 100 shares purchased at $292.20, requiring $29,220 of capital.

That's obviously much more expensive than the $262.40 I paid for my previous 100-share position.

In fact, I'm paying $29.80 more per share to get back into a stock I owned only days earlier.

That hurts.

But there's also an important difference.

I didn't chase ARM all the way to roughly $310.

My new entry at $292.20 is about $17.80 below $310.

The previous trade is over. The question now isn't whether I should have held the old shares.

The question is what I do with the position I own today.

And Yes — I Sold Another Covered Call

This is where some readers will probably think I've learned absolutely nothing.

After watching a $265 covered call cap my upside, I bought ARM again at $292.20 and sold:

1 ARM $295 call expiring October 2

Premium collected:

+$649.96

That puts my effective entry at roughly $285.70 per share if I simply use the premium as an economic reduction against the new 100-share purchase price:

$292.20 − $6.4996 = $285.70

But once again, that premium isn't free.

I've capped the upside on these 100 shares at $295 through October 2 unless I close or adjust the call.

The difference this time is that I'm going into the trade very aware of that trade-off.

What Happens If ARM Takes My Shares Again?

This is where the numbers become interesting.

If ARM finishes above $295 and I'm assigned, the stock portion would generate:

($295 − $292.20) × 100 = $280

Add the $649.96 call premium, and the simple maximum economic gain on this new stock-plus-call cycle would be approximately:

$929.96

That's roughly 3.18% on the $29,220 stock purchase, before fees, taxes and financing costs.

And the expiration is only October 2.

Would I miss another huge ARM rally if the stock suddenly exploded above $295?

Absolutely.

That's precisely the risk I just experienced.

This time, however, I'm consciously accepting it in exchange for nearly $650 of immediate premium on a very short-duration call.

I Also Cleaned Up 20 Older ARM Shares

There was another ARM transaction today.

I sold 20 older shares at $289, receiving $5,779.92.

That sale produced a modest:

+$84.22 realized profit

It's not a huge win.

But that's fine.

I'm trying to simplify the position rather than accumulate multiple ARM lots with different objectives.

After today's transactions, my ARM setup is clean:

100 shares.

$292.20 purchase price.

One $295 covered call.

October 2 expiration.

The call is fully covered.

ARM Wasn't My Only Premium Trade

I also went back to Marvell Technology (MRVL).

I sold:

1 MRVL $280 call expiring October 9

Premium collected:

+$569.96

That position remains open, so I'm not counting the $569.96 as realized profit.

It's premium collected against an obligation that still exists.

Combine it with the ARM call, however, and today's new option premium totaled:

$1,219.92

That's the number that stands out from today's trading.

My September 29 Scorecard

Trade	Cash Flow	Status/P&L
Bought 100 ARM @ $292.20	−$29,220.00	New position
Sold 20 older ARM @ $289	+$5,779.92	+$84.22 realized
Sold ARM $295C 10/2 ×1	+$649.96	Open
Sold MRVL $280C 10/9 ×1	+$569.96	Open
Total	−$22,220.16	+$84.22 realized

New option premium collected: $1,219.92.

That's different from saying I made $1,219.92 today.

I didn't.

The ARM and MRVL calls are still open.

The confirmed realized profit from today's transactions is $84.22 from selling the older ARM shares.

The $1,219.92 is premium collected that now has to be managed.

That distinction matters.

The Irony Isn't Lost on Me

Four days ago, my ARM shares disappeared at $265.

Then ARM ran toward $310.

I calculated approximately $4,500 of upside that I missed because of that covered call.

Now I'm back in ARM at $292.20...

…and I've sold a $295 call.

There is definitely some irony there.

But I'm not trying to eliminate assignment from my strategy.

I'm trying to get better at deciding when the premium is worth the upside I'm selling.

That's a different lesson.

Covered calls aren't inherently good or bad.

They're an exchange.

I receive money today.

In return, I agree to give someone else my upside beyond a certain price for a certain period of time.

Today somebody paid me $649.96 for that right on ARM.

I accepted the deal.

One Thing Has Changed

The first ARM cycle taught me that I shouldn't look at premium in isolation.

A $700 premium sounds fantastic until the underlying stock runs another $45 after assignment.

So this time I'm watching two numbers:

How much premium am I earning?

And:

How much upside am I selling?

At $295, I'm only giving ARM about $2.80 of stock appreciation above my $292.20 purchase price before the call becomes in-the-money.

That's aggressive.

I'm aware of it.

If ARM explodes again, the covered call could once again leave substantial upside on the table.

But if ARM stalls, falls, or simply stays around these levels through October 2, that $649.96 premium becomes very meaningful against a three-day holding period.

That's the bet.

$1,219.92 Collected. Now Comes the Hard Part.

Today's trades resulted in $22,220.16 of net cash leaving the account, primarily because of the new ARM purchase.

I realized only $84.22 from the older ARM shares.

Yet I also collected $1,219.92 of new option premium between ARM and MRVL.

Now I have to earn it.

The next few days will determine whether I close the calls early, let them decay, roll them, or accept assignment.

And ARM has already taught me what happens when assignment arrives immediately before a huge rally.

I'm still selling covered calls.

I'm just no longer pretending that the premium is the whole story.

The premium is what I get paid.

The upside I surrender is the price.

And this time, I'm watching both.