Rolling a CRDO Covered Call Option
The best way to cement a new skill is to do it often enough that you don’t have to spend a lot of time getting it done in the future. That is certainly true of options trading. Even if you only earn $25 per week trading options, if you do one trade every week for 52 weeks you will earn $1,300 in that year. That can translate into more income each year as you quickly enter each trade on other positions. If you never start, you will leave money on the table.
One of my readers, (Mary – you are making excellent progress!) had this to say in a recent email to me: “I wanted to share my progress with my Options trading. After running the numbers, I made $3,194.96 in 2025, with my first trade beginning on May 1st. My YTD 2026 Options trading income has almost cleared $1,500. Wow! I am pleased. Thank you for all your guidance and wisdom! I didn’t even realize I have made that much money off those seemingly small trades.” This young woman is making sound decisions in changing her investing style and choices. There is no better reward for a teacher than to see a student succeed.
2020-2025 Options Income History
I’ve shared this before, but it is helpful for new readers to see this. I started small in 2020 as I learned how to trade options. I read some books and watched some YouTube videos. I researched terminology on Investopedia. I entered small options trades on Fidelity’s Active Trader Pro platform, learning from my failures and successes. As I refined my process the goals were to reduce the time spent on trading options and to increase the income per trade. While $25 per trade is good, $500 per trade can be achieved as you gain assets and confidence in options trading.
Continuing the CRDO Option Contract Journey
In yesterday’s post, “One Stock Every Morning”, I noted CRDO’s surprising rise in the price of my shares. This is one thing I said: “I hold 100 shares of CRDO in my ROTH IRA that I purchased in March for $99.50 per share. Today it looks like they will shoot up over $155 per share. That is bad news, as I have a covered call contract on those shares to sell them at $126 per share. To make matters worse, the contract expires on Friday.”
There are actually two ways to deal with this. One is to do nothing. When I first started trading options that was the default action. I did nothing and my shares were called away. While I made a profit, it was clearly less than the profit I was expecting. If I did nothing, I am 99.9% certain my 100 shares of CRDO would sell for $12,600. That is OK, as I am making a profit. But there is a better way.
The Better Choice: Roll
The second choice that is often feasible and rational is to roll the option. Rolling an option is accomplished with a single trade on Trader+. The essence of this trade is that it enters two trades. The first of the pair is a “BUY TO CLOSE” order to exit the existing contract. You have to pay someone to do this. The second part of the pair is a “SELL TO OPEN” order to roll the contract to a higher price with a longer expiration. For example, I rolled the CRDO contract from April 17 to June 18. The share price I can receive from my shares also moved up from $126 to $140. While this is less than the current share price of $159.52, the potential gain on the sale of the shares, along with the income from the BUY/SELL order is another piece of income.
Now, if on June 18 the CRDO shares are still above $140/share, I will receive $14,000 instead of $12,600 for my block of 100 shares. In addition, I gained some income from the option roll of $000.00.
For Active Trader Pro Friends
In the past when I taught family members and friends the basics of covered call option trades, the tool of choice was Fidelity’s ATP. The Trade Armor window was the main hammer. You could finish an option trade quickly and see the results with little confusion. Here, for example, is what the CRDO options trade looks like in ATP.
The Trader+ Trade Windows
There is a bit of exploration in Fidelity’s Trader+ to find the trade I want to do. The following images help illustrate my thought process.
First of all, I considered rolling the $126 contract to $130 (May 1). That, however, would result in me having to pay for the trade (NET DEBIT.) I want to have income, not pay for the roll.
Then I considered a different trade as the share price dropped. Investors change their minds based on the price direction. This would result in a NET CREDIT.
Another possibility was to roll out to a future date like May 22. Note that I never enter a trade for the current BID ($0.70) and I think the current ask ($7.50) is overly optimistic. I usually pick a net credit closer to the MID ($4.10). Why take $0.70 if you can get $4.10 per share?
The next image shows that I decided to go out to June 18 with a potential net credit of $4.50. Note that my desired income is just a bit higher than the midpoint at this point in time ($4.40.)
This is the order preview screen.
This is the order placed screen.
This is the positions screen, showing that my roll from $126 to $140 was a success.
What Might Happen Next with CRDO?
That is an unknown. The share price could continue upwards. It could stabilize in the current price range. It could drop significantly. I choose to be an investor who doesn’t count his chickens until they hatch. Experience tells me, however, that this strategy works. Furthermore, it isn’t as if I have bet the farm on CRDO. My total invested dollars are still only $99.50 per share or $9,950.
Seeking Alpha’s Alpha Picks Subscription
At least two of my readers have asked me if I use an Alpha Picks subscription to find investments like CRDO. The short answer is “no.” I use the Quant Rating feature known as “Ranked in Industry” to find the top-rated investments by industry. Using that tool, MU and CRDO are the cream on the top of the sixty-nine semiconductor companies. CRDO is number two.
The Alpha Picks subscription is $499 per year. It might be worth it for some investors as a way to save time to find solid investment ideas. Some of the reasons this might be a helpful tool (according to Seeking Alpha) are: 1) Two data-driven stock picks each month designed for long-term investing. 2) Performance that has significantly outpaced the S&P 500 since launch. 3) Alerts when a pick is downgraded to Sell or when new opportunities are added. And 4) Full access to all active Alpha Picks (30+ stocks) from day one. They suggest that this service will help you “Build a Best-in-Class Portfolio.”
Recommendation
Start small. The goal isn’t to make $500 per trade on your first trade. Set a goal of $1,500 for 2026. Little trades can add up to big dollars.
As I frequently suggest, Seeking Alpha is a must for anyone who wants to find good investments and avoid bad ones. I cannot tell you how many bad choices I have avoided, but they number in the hundreds. The QUANT rating saves a lot of time in finding good ones and avoiding the garbage.
Credo Technology Group Holding Ltd
Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet, and PCIe applications in the United States, Taiwan, Mainland China, Hong Kong, and internationally. It provides HiWire active electrical cables solutions, including HiWire CLOS, SPAN, SHIFT, and SWITCH; optical PAM4 digital signal processors; low-power line card PHY; serializer/deserializer (SerDes) chiplets; and SerDes IP, as well as integrated circuits. The company also offers intellectual property solutions consist of SerDes IP licensing. In addition, it offers predictive integrity link optimization and telemetry; PCIe retimer solutions; and support and maintenance, engineering, and royalties services. The company sells its products to hyperscalers, original equipment manufacturers, original design manufacturers, and optical module manufacturers, as well as into the enterprise and HPC markets. Credo Technology Group Holding Ltd was founded in 2008 and is based in Grand Cayman, the Cayman Islands.
Seeking Alpha Subscription Information
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