Field notes on selling options systematically.
The core course, in order, from what an option is through to running a process of your own. Each part stands on its own, so start at the beginning or jump straight to the one you need. Parts marked Optional cover structures you may never use — nothing later depends on them.
A plain-English explanation of the cash-secured put: what you are agreeing to, where the premium comes from, the two ways it ends, and the arithmetic of a single contract worked through end to end.
Intrinsic value, extrinsic value and the decay curve. Why time decay is the entire engine behind selling options, why it is not linear, and why a faster decay rate does not mean a better trade.
Volume and open interest are the two most confused numbers on the options chain. What each actually counts, why open interest matters more to a seller, and how to read the two together.
What actually happens to a short put on expiration day. Exercise-by-exception at one cent, the after-hours window nobody accounts for, pin risk at the strike, and why the final day carries risk the rest of the contract does not.
The spread is the most reliably underestimated cost in options selling. What it is, why it is wider on options than on shares, how to measure it against the premium, and when a rich-looking contract is not.
Pension funds and insurers spend enormous sums every year on put options they fully expect to expire worthless. Understanding why they do it tells a put seller exactly what business they are in.
A contract paying 1.2% over three weeks and one paying 2.5% over eight are not comparable until both are expressed the same way. How to normalise, and the three ways annualising misleads.
The counterparty to your put is usually not a person with a view. It is a market maker who hedges the position immediately and profits from the spread. What that means for your fills, your liquidity and your assumptions.
High premium is easy to find. Telling a genuinely rich contract from one that only looks rich is the hard part. Three cases where the headline number misleads.
Moving beyond gut-feel strike selection. A framework for systematic cash-secured put selling: universe, timing, strike, and what happens after entry.
Probability of Profit for short puts: what it measures, how it relates to delta, why a high POP can still lose money, and how to read it sensibly.
A seller-focused explanation of IV Rank: what implied volatility measures, why ranking it normalises across stocks, and how to read it without over-trusting it.
Most people who stop selling cash-secured puts do not stop because the strategy failed. They stop for three predictable reasons, all behavioural, all avoidable once named.
The VIX is widely treated as a crash warning. It is a 30-day expectation of index movement derived from option prices, it is not a timing indicator, and knowing the difference matters most to option sellers.
A high win rate is the most quoted and least informative number in options selling. What expectancy actually measures, why premium selling produces lopsided payoffs by construction, and the arithmetic that decides whether a strategy makes money.
Three episodes where selling volatility stopped working at once: Volmageddon in February 2018, the COVID crash of March 2020, and the April 2025 tariff selloff. What each did to a short-put book, and what they have in common.
Eight short puts across eight tickers can be one position. What correlation does to a put-selling book, a day from our own settled record where more than half the contracts lost at once, and how to measure exposure that ticker counts hide.
Every safety buffer on a short put assumes the price can be observed on the way down. Gaps break that assumption. What causes them, why stops do not help, and why premium is the wrong thing to weigh a gap against.
Early assignment is the risk put sellers worry about most and understand least. Why holders almost never exercise early, the two conditions that change that, and why expiration is the moment that actually matters.
What happens to a short put when the underlying is acquired, halted, split, spun off or delisted. How the OCC adjusts contracts, why an adjusted option stops behaving like the one you sold, and which cases actually hurt.
What actually happens when a short put is assigned: the mechanics, the arithmetic of the loss, and why calling it a discount on a stock you wanted anyway is the most expensive story in put selling.
Barchart Premier is a broad market-data platform with an options screener attached. StratosIQ scores cash-secured puts and nothing else. An honest comparison of what each does well for one specific job.
A put credit spread caps the loss a naked short put leaves open. What that protection costs in premium and capital, when the exchange is worth making, and why the comparison is not the one most people run.
StratosIQ runs two scoring engines over cash-secured puts. Patrol excludes contracts spanning an earnings announcement; Strike requires one. What that inversion changes, and which output suits which approach.
A cash-secured put and a covered call at the same strike have identical payoff diagrams. Why that is true, what actually differs between them — capital, timing, tax, assignment — and how to choose.
An honest comparison of StratosIQ and Market Chameleon for cash-secured put sellers: what each does well, what each lacks, and how the pricing compares.
In 2006 a hedge fund began buying protection on subprime mortgage bonds for a few cents on the dollar. The people selling it thought they were collecting free premium. They were the ones with the real risk.
Between 2004 and 2008 Berkshire Hathaway sold index put options with fifteen- and twenty-year expiries, collecting $4.9 billion in premium. Then the marks went $10 billion against them, and the position was held anyway.
Russell Sage brought puts and calls to Wall Street in 1872 and was known as the Father of Puts and Calls. In the panic of 1884 he lost $7 million and never traded them again.
In April 1993 Berkshire sold puts on Coca-Cola and collected $7.5 million. The contracts expired, not one share was bought, and that was the trade working exactly as designed.