The bull put spread is a staple income strategy: short a lower-delta put, buy a farther OTM put, collect net credit, profit from time decay and upward drift. Yet this seemingly conservative structure harbors a hidden breakpoint. As the underlying declines, the short put’s delta accelerates non-linearly. When it reaches 0.40 delta, the position’s gamma…
Earnings announcements create the perfect storm for options traders: implied volatility collapses while directional risk explodes. For senior traders managing concentrated positions, this isn’t just about P&L—it’s about survival. The scenario we’ll dissect today represents the #1 cause of unexpected capital calls in professional options portfolios: a low-probability short put that morphs into a high-delta…
The “Wheel” is one of the most popular options strategies for generating income. At its core, it’s a systematic process: you sell cash-secured puts on a stock you’re willing to own. If you get assigned, you then sell covered calls against those shares. But as any Wheel trader knows, the real challenge isn’t the “what.” It’s…