SMCI Short Strangle — 2026-10-30

SMCI (Super Micro Computer, Inc. - Common Stock): options flow was balanced/mixed, IV rank 71 (elevated). Gamma is roughly balanced. Structured as a Short Strangle (sell $31P / sell $34C) expiring 2026-10-30 (14 DTE) — balanced flow + very high IV → short strangle. Net credit $268 (undefined risk — size small). Breakevens $28.32 and $36.68.

Underlying: SMCI @ ~$31.72 | 2026-10-30 (14 DTE) | Net credit (entry): ~$268 per spread. Use limit orders at the mid or slightly better.

ENTRY: Sell the $31 put AND the $34 call (both naked) expiring 2026-10-30 (14 DTE) as one strangle at a LIMIT of the mid or better — target credit $268, each short delta ~0.16–0.20. IV rank 71 is elevated — premium is rich, a good backdrop to SELL; any vol contraction adds to the win. UNDEFINED risk on both tails — only in genuinely rich IV, small size. Gamma: dealer gamma is roughly neutral — no pin edge either way; put wall (support) at $32; call wall (resistance) at $34. | TAKE PROFIT: Buy the strangle back to LOCK IN gains at ~25–50% of the $268 credit (undefined-risk, so bank it sooner — 25% on a strong move). Also close on TIME: exit around 21 DTE regardless of P&L to sidestep the late-cycle gamma/pin risk near SMCI's short strike(s) — currently 14 DTE, so plan the exit 0 day(s) out. Profit zone $28.32–$36.68. Never carry a naked strangle into expiration. | IF TESTED: Roll the UNTESTED side closer to price for more credit whenever one short is challenged (delta ~0.30) — e.g. if SMCI sells off toward the $31 put, roll the $34 call down to re-collect and lower the breakeven. If a short's loss hits ~$536, roll THAT side out ~7–14 days for a credit; if the move persists, go INVERTED (roll the tested short beyond the other) to keep taking in credit, and/or CONVERT to an iron condor by buying protective wings to cap the runaway tail. Treat a close below the $32 put wall as the hard trigger to act (the pin support has failed); Treat a close above the $34 call wall as the hard trigger to act (the resistance magnet has broken). In a negative-gamma regime defend a full step earlier. Undefined-risk structure — keep size small and honor the stop; do not let a naked tested strike run without a defined plan. | MAXIMIZE: Range-bound and both sides decaying? Roll the nearer winning short in toward price to harvest extra premium (a classic strangle "leg-in"), or bank ~50% and redeploy. Extend duration only once most of the credit is captured.