Why I’m Not Worried Even Though RUM Dropped This Week (Thanks to the Greeks)
June 13th
Let’s cut straight to it:
RUM is down this week. The stock price slid from $8.92 to $8.65 — and if you just looked at the share price, you might think:
“Uh oh — isn’t that bad? Aren’t you losing money?”
Nope. I’m not sweating at all. In fact, I’m right on plan.
📊 The Big Secret Nobody Tells You: The Greeks Run This Machine
Most people in my page are familiar with stock prices going up and down — but once you get into options, there’s an entirely different world operating behind the scenes called The Greeks.
They sound complicated at first, but they’re actually your best friends once you learn what they mean. The Greeks are simply mathematical formulas that explain how your options contracts behave as time, price, and volatility change.
Here’s the quick cheat sheet:
- Delta: how much your option changes as the stock price moves.
- Gamma: how fast Delta changes (kind of like Delta’s momentum).
- Theta: how much value your option loses every day due to time passing.
- Vega: how much your option reacts to changes in volatility.
- Rho: how much your option reacts to changes in interest rates (we almost never care about this one in covered calls).
🕰 Let’s Focus on Theta — My Favorite Greek
Theta is your best friend when you’re running a covered call machine like I am.
- Theta = Time Decay.
- Every single day that passes, my open contracts lose value just because time is ticking.
- Even if the stock does nothing — or even drops a bit — Theta keeps grinding away at my open positions, paying me slowly and steadily.
🔬 Let’s Apply It to My Current RUM Position
Right now I’ve got:
- A $9 call expiring 7/18.
- An $8 call expiring 10/17.
When I sold these calls, I was paid upfront premium (that sweet, sweet option income). Every day, even if the stock price wiggles around, Theta is quietly eroding the remaining value of these contracts.
This week:
- RUM dropped from $8.92 to $8.65.
- Normally you’d think that’s bad. But…
- My $9 call actually lost value — it dropped from $0.85 to $0.68.
- That’s Theta working.
- The contract is worth less now because there’s less time left for it to be profitable for the person who bought it from me.
📉 Why a Drop in Stock Price Didn’t Hurt Me
If you only owned the stock, you’d care a lot more about short-term drops.
But because I’m running a covered call machine:
- The premium I collected softens any drops.
- My cost basis keeps falling as I stack income.
- Theta keeps grinding my contracts down — even if the stock goes sideways or down slightly.
- My adjusted cost basis right now is down to about $6.37/share thanks to premiums I’ve already collected.
So even with the price sitting at $8.65 right now, I’m sitting on a very healthy cushion.
🚀 The Game Plan: Letting It Ride (For Now)
Because Theta is still doing its thing, I have no reason to panic or react emotionally:
- My July $9 call has over 50% of its premium already burned off.
- My October $8 call has plenty of time — it’s slightly in the money right now, but nothing dangerous.
- As long as I stay patient, both contracts are slowly paying me just for sitting here.
I’ll roll or adjust if the numbers tell me to. But for now? The machine is doing exactly what it’s supposed to do.
🧠 The Takeaway for My Followers:
This is why I keep saying:
- Covered calls are a business, not a gamble.
- If you understand Theta, you stop fearing little price dips.
- The stock can bounce around all it wants — I get paid every day for simply holding my shares and renting them out.
This is the power of building a system where time is working for you, not against you.
🏴☠️ The RUMble Machine Is Green
✅ Shares stacking
✅ Premiums stacking
✅ Time decay working
✅ No cash sitting idle
✅ Patience paying off
👉 If you want to keep following as I build this machine into my long-term passive income engine, stick around.
I’ll keep dropping real-time updates as we scale it step by step.
If you’re following my F.I.R.E. Engine strategy, I recommend starting with Robinhood for a few reasons:
- It’s dead simple to use
- You can sell covered calls directly in the app
- You get a free stock when you sign up with my link
It’s what I use, and I’ll be walking through screenshots and examples using it throughout this series. So unless you already have a favorite, just start here and keep it easy.