Options premiums plays

Dude. NBIS. Easily.
You have the perfect amount to do it, and you can easily collect 200-300 weekly going $5-10 out of the money.

Premiums are insane. IV is typically 90+

Your March 6th $110s are going for about $3.90 right now

that's ingenius.

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So you're selling several thousand contracts every morning? Around which Delta?

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1 contract, it trades just under 700, so 1 contract for a cash secured put needs just under $70k to cover it

I aim to make $20-$30 each day, it usually falls in their 85-90% range of "chance of making a profit" so delta around .15ish?

Just obviously depends on the IV at the time. I've gotten deals as close to $40 on super high IV days, and about $20 on lower volatility days



Monday was a pretty wild day I saw a weekly (expiring Friday 2/27) for almost $200 (effectively $40/day) and was way way way out of the money, like $667 strike when XSP was trading $683-$684 I think that morning (up to $692 right now). That same option is now worth like $21-$24

This is why I like moving to weeklies or monthlies once they pay interest on that cash balance still because could have closed that trade to secure $175-$180 and opened a Friday expiring one today for another $90-$100 that was like a $679 strike still. Win both of those and thats an easy $265-$280 for the week (on top of interest earned on the cash at 3.35% which is what another $40-$50 or so). That would be a nice week making over $300 on just our savings

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This is why I like moving to weeklies or monthlies once they pay interest on that cash balance

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When does that happen?

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What happens on those 5 trades you lose? You said you don’t get assigned, do you just close out the trade for a loss?

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It just settles for cash, no assignments.

So if my strike was sold at 680, and it ended at 679, it deducts $100 from my cash balance, i keep the original premium still.

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Seems like one bad day due to macro events could wipe out months of premium grinding.

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This isnt a passive thing completely, which is part of only 5 losers over the last year-ish or so. 1 loser was bad $324 net of my premium (tariff day!), the others were less bad around $50 or less lost net of premium. All in all I am around $5k annualized net before interest is added.

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And it’s actually worse than just owning the S&P 500. If you own the index, you get unlimited upside and can ride out drawdowns over time

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As I said previously, this is savings, not long term investments. This cash goes up and down from drawdowns and contributions on the regular. We might need a large sum at any point quickly...the S&P has done great recently but if I just set it and forget it in there and we need a large sum in a year it dives 20%, well that sucks. The whole point of the strategy is just to boost savings return and keep it extremely liquid with not much of a chance of any real downturn. The upswings in s&p are great but downswings can be huge too. You forgot to mention im capping my downside as well, which is the main point on something like liquid savings money you typically want to have.

On top of that, this is just fun for me.

I have no less than 3 covered call options open at any given time. I would say it averages around $50-100/week, nothing crazy. For example, I have a 250 AMZN open expiring Friday. I made $20 on it at VERY low risk of being called away. (If AMZN soared to 250 in that period, I’d be happy to sell them anyway) Doesn’t sound like much, but I’m not planning on selling these long positions anyway. So why not take the premiums while I wait?

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Maybe this is the point I’m fundamentally misunderstanding. Isn’t the entire point of selling a put that you agree to absorb the downside (aka, you are insurance for the market tanking). This seems like the exact opposite of what you’d want from “savings”.

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I'm selling typically well out of the money options expiring same day, again only lost 5 times out of 200ish trades. If I was being riskier I could shoot for stuff much closer to that its trading at and earn much higher premiums, im fine with $20-$30 premiums on things that have a very very high chance of winning and I monitor things closely as to not have many super "blow up" days as I've had just 1 of those so far ($300ish loss). The other losses I had were easily made up within 2-3 days of trading again. Whole point again is offering decent upside (capping it - yes) while remaining liquid and not having any big downswings really. It's easy to step back and let super high IV days just got sometimes to avoid any potential blow ups as well. I'm not chasing max yield here, just safe steady return typically.

Again, if I left $70k in the s&p back in 2022 and let it ride, then needed a large chunk of that end of year, my $70k turned into $57k. I'm just mitigating that risk by capping upside but limiting downside in a big way as well. I'm earning my 3-4% interest as if its in HYSA then banking some bucks on top of that from way out of the money options premiums to bring it to around a 10% return staying extremely liquid. Whole point is keeping it all liquid and limiting any real long term downside.

It's also nice 60% of net earnings on the premiums are taxed at 15% and not 24% federally with index options like XSP. Doesn't sound like a ton but on $5k profit its $450 in tax savings.

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Whole point is keeping it all liquid and limiting any real long term downside.

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During a real sell-off, you would get completely wiped out. Luckily we haven't seen one since you started using this strategy, but don't mistake that for "limiting downside risk".