Sell puts on red days for stocks you want to own 🔥
Lock in profits on those puts when the market goes green 💰
Sell calls on green days for your wheel strategy stocks 🔥
You’ll need a lot of patience in between
Simple but works like a charm 💰
$TSLA $NVDA $AMZN $QQQ $SPY
The best way to generate consistent income from stocks you already own:
Sell covered calls.
You own 100 shares. You sell someone the right to buy them at a higher price. You collect premium upfront. That's it.
How I do it:
- Pick a strike above my cost basis. I never sell a call below what I paid.
- ~0.20 delta. That's roughly an 80% chance the call expires worthless and I keep my shares plus the premium.
- 30 DTE. Theta decay accelerates in the final 30 days. That's when time is working hardest in my favor.
- Close at 50% profit. Don't hold to expiration trying to squeeze out the last dollar. Take the win, free up the position, sell another one.
When to sell them:
- Stock is overbought. RSI pushing above 70. The stock has run hard and is likely to cool off or consolidate.
- Price is near resistance. If the stock keeps getting rejected at $105, sell the $105 call. You're selling the right to buy at a price it can't break through.
- You're okay with selling at that price. If the stock gets called away, you sold at a profit. That's not a loss. That's the plan working.
When NOT to sell them:
- You're extremely bullish and expect a big move higher. The call caps your upside.
- The stock is well below your cost basis. Selling a call below what you paid locks in a loss if you get assigned.
- It's your highest conviction long-term hold that you never want to let go of.
The math:
If you own 100 shares at $92 and sell a $100 call for $2.00, you collect $200. If the stock stays below $100, you keep the shares and the $200. Your cost basis drops to $90. Do that every month and you're generating consistent income while you hold.
This is one piece of a bigger system. I also sell cash-secured puts to enter positions at a discount and buy LEAPs for selective leverage on high-conviction names.
NFA DYOR
If you're trading options without understanding the Greeks, you're flying blind.
Here's what each one means and why it matters:
Delta - How much your option moves for every $1 move in the stock. A 0.50 delta means the option gains $0.50 when the stock moves $1. Also serves as a rough probability estimate. I target ~0.20 delta when selling puts (~80% chance of keeping premium).
Theta - How much value your option loses each day just from time passing. This is why selling options is so powerful. When you sell, theta works for you. When you buy, it works against you. It accelerates hard inside 30 days.
Gamma - How fast delta changes as the stock moves. High gamma means your delta can shift quickly, making the position more volatile. This matters most for short-dated options near the money.
Vega - How much your option's price changes when implied volatility moves. High IV = expensive options (good for selling). Low IV = cheap options (good for buying LEAPs). This is the first thing I check before any trade.
Rho - How much your option's price changes when interest rates move. The least impactful Greek for most retail traders, but worth knowing it exists.
The two that matter most for my system:
Theta is why I sell options. Time decay puts money in my pocket every single day.
Vega is why I check IV before every trade. It tells me whether to sell premium or buy LEAPs.
You don't need a PhD in the Greeks. But understanding these five will immediately make you a better options trader.
The markets just seem…off.
Everything seems off.
Literally.
AI is advancing at a rapid pace.
The US is at war with Iran.
The job market is abysmal.
Home prices are still extremely high.
Inflation is not going down.
Weird times…
Do not sell cash-secured puts without knowing these 10 things:
1. Stock selection is 90% of the trade. If you wouldn't hold the stock for years, don't sell puts on it.
2. Target the 0.20 delta range. That's roughly an 80% probability of keeping your premium.
3. 30 days to expiration is the sweet spot. Theta decay accelerates hardest in this window.
4. Close at 50% profit. Don't hold to expiration. The annualized math on closing early destroys holding for the full premium.
5. Your strike should be at a price you'd love to get assigned at. Not tolerate. Love. If there's hesitation, move the strike lower or skip the trade.
6. Pick strikes at or below support levels. Stack technical conviction on top of the statistical edge from delta.
7. Check the IV environment first. High IV means fatter premiums and more cushion. Low IV means you're not getting paid enough for the risk.
8. If you're assigned, that's not a loss. That's the next phase. You now own a stock you wanted at a price you chose. Start selling covered calls.
9. Check liquidity on the specific contract. Wide bid-ask spreads are a hidden tax on every trade. If the spread is wide, move on.
10. Have an exit plan before you enter. Know when you'll roll, when you'll take assignment, and when you'll cut the loss.
This is the foundation of my entire system. I sell puts on stocks I want to own, at prices I've already decided I'm comfortable with, and I get paid to wait.
NFA DYOR
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