11d • General discussion
ACE FUND - ISSC (call/put) ANALYSIS
ACE FUND TRADE NOTE — ISSC POSITION ANALYSIS
SPI SKOOL ANALYSIS — INNOVATIVE SOLUTIONS & SUPPORT (ISSC)
Current Price: ~$25.56
Position:
• Long 100 shares at $30
• Short May 15 $25 Call
• Short May 15 $25 Put
This is effectively a covered call + cash-secured put at the same strike, sometimes called a synthetic short straddle with stock ownership. The strategy is betting that ISSC will hold around or above $25 into expiration while collecting option premium to reduce the loss from the $30 entry.
The goal of the trade is premium income and position repair, not maximum upside.
POSITION BREAKDOWN
Stock
100 shares purchased at $30 = $3,000 cost basis
Options
Sold May 15 $25 call
Sold May 15 $25 put
Premium collected from these options lowers the effective cost basis of the trade.
The trade outcome depends heavily on where ISSC closes on May 15 expiration.
SCENARIO ANALYSIS
If ISSC drops to $20
Shares value = $2,000
Loss on original shares = -$1,000
The $25 put will likely be assigned.
You would buy another 100 shares at $25 = $2,500.
Total shares after assignment = 200
Average cost becomes roughly around the mid-$27 range depending on option premium.
This is the highest risk scenario because you double the position while the stock is falling.
If ISSC closes near $25
This is the sweet spot for this strategy.
The call expires worthless.
The put expires worthless.
You keep the entire premium from both options.
Your stock position still shows a paper loss from the $30 entry, but the option income reduces that loss.
This outcome represents the maximum income scenario.
If ISSC rallies to $30
The $25 call will likely be exercised.
Your 100 shares get called away at $25.
You lose the upside between $25 and $30, but the premium from selling the call helps offset that loss.
The trade becomes a controlled exit strategy.
This caps the upside but reduces the downside damage from the original entry.
If ISSC rallies to $35
The result is the same as the $30 scenario.
Your shares are still called away at $25.
This means you miss the rally above $25.
The trade sacrifices upside in exchange for premium income and risk control.
STRATEGIC INTERPRETATION
Bullish Case
ISSC has strong aerospace backlog and revenue growth.
If momentum continues, the stock could revisit the $28–$32 range over the next six months.
Neutral Case
The stock consolidates between $23 and $27.
This is actually ideal for the current options strategy.
Bear Case
If ISSC breaks below $23 support, the short put increases risk because you could end up owning 200 shares into weakness.
SIX MONTH FORECAST
Base case range: $24–$32
ISSC is a profitable small-cap aerospace systems company with growing defense and avionics demand. The fundamentals are solid but the stock is volatile because of its small market cap.
Near term the $25 level is the key battleground. Holding above that level into May would validate the strategy.
ACE FUND TAKEAWAY
The covered call was a smart repair move after buying shares at $30.
The added short put makes the strategy more aggressive, because it commits to buying more shares if the stock falls.
Best outcome: ISSC stays near $25 and both options expire worthless.
Worst outcome: ISSC falls below $25 and the position doubles during a decline.
This trade is essentially saying:
“We believe ISSC will defend $25 over the next 30–40 days.”
SPI SKOOL LESSON
Premium strategies are powerful, but they always involve a trade-off.
Covered calls reduce upside.
Short puts increase downside exposure.
The key skill is knowing when to use them to repair a position versus when they increase risk too much.
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ACE FUND - ISSC (call/put) ANALYSIS
skool.com/oil-option-trading-101-1282
How to use options to reduce risk in a portfolio. You can use this for all stocks and commodities but we going to trade Crude oil and oil options.
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