In Part 1, we talked about how to stop paying for insurance. In Part 2, we are going to talk about how to stop paying for stocks. The trouble with buying stocks is that they are capital inefficient. If you want to buy 100 shares of Dell, you have to find roughly $13,500. If you…
The basic premise of owning stocks is that you want them to go up. This is a good premise. It has worked, historically, quite well. But sometimes stocks go down, and this is generally considered “bad.” If you are a rational economic actor, you might look at your portfolio of tech stocks and think, “I…
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…