Market Movements

^{*Weekly Return is calculated as market open of the previous Wednesday, to market close this Tuesday (yesterday); Current Level is Tuesday’s (yesterday’s) close.}

Weekly Rollout

• Tech pulls us lower with a busy earnings day

• The UAE is breaking up with OPEC

• Elon Musk says retirement funds won’t matter?

• How did the economy change under Jerome Powell?

• It is extremely, extremely likely that rates are held at the fed meeting

• US consumer confidence crept up in April

Thought Throttle

The market is ripping lately.

But whether the market is “hot, hot, hot” or drifting sideways, one truth holds.

Rushing almost always costs us.

The smartest way to grow a portfolio through options is to stay patient and use premium to enter and exit exactly when we want.

We start with the business itself. Do we like the company? Would we happily own it long-term at today’s valuation? If the answer is yes, we layer options around that conviction.

• Cash-secured puts: We sell a put at a strike we’d be thrilled to buy at. We collect premium upfront. If the stock stays above our strike, we keep the full credit and do it again. If assigned, we buy the shares at our chosen discount—exactly the entry we wanted.

• Covered calls (once we own the shares): We sell a call at a strike that matches our exit target. We collect more premium while continuing to own a business we believe in. If the stock rises but doesn’t hit the strike, we keep both the shares and the credit. If it does get called away, we sell at our predetermined price plus premium.

CSPs let us grow the portfolio methodically. We only take ownership when the price meets our terms. The stock can grind or rip higher, and we still collect premium month after month. We roll up only when our conviction in the business remains strong at the new level.

Covered calls then keep the income flowing while we hold names we already like. We aren’t forced to sell early, but the short call caps the exit at a level we decided was good. Or at least fair enough for the premium.

We control the entry with CSPs and the exit with covered calls. We get paid to be disciplined instead of emotional. And we build a portfolio of companies we actually want to own.

Of course, there are risks in bull markets. 

With CSPs, a strong rally can mean we never get assigned on names we like. The stock simply keeps running and we miss the entry.

To try and combat this, we can sell puts slightly closer to the money (e.g. 35 vs 25 delta) or be willing to roll up and out for additional credit when we still want ownership.

With covered calls, we risk getting called away too early and missing big upside if a stock really takes off.

A practical fix is choosing strikes that reflect our actual long-term target price, not just the highest premium available. We can also potentially buy the call back (unwind) if the business case remains strong and we want to keep riding the upward momentum.

These adjustments aren’t a total-fix (as if those even exist), but they keep us in control instead of reacting emotionally. We won’t capture every move, but we gain consistency and discipline in pursuit of ownership of quality businesses.

At the end of the day, the market will do what it does. Our job is to show up with a plan that rewards patience and keeps the focus where it belongs: on great businesses.

Cash-secured puts are the throttle for steady portfolio growth. Covered calls keep the engine running smoothly once we’re in.

Thanks for reading.

Quote(s) I Like

Trade Mechanics

Let’s look at two approaches on Nvidia (NVDA), which is currently sitting at $213.17.

One using a cash-secured put, and one using a covered call. Each option below represents roughly a ~25% delta contract expiring 18 June 2026.

The cash-secured put collects $5.78 mid on the 195 strike for $18,922.50 capital at risk and a $189.23 cost basis. It delivers a mechanical 3.055% return if unassigned with full downside buffer to that entry level.

The covered call sells the 240 strike for $4.65 mid against long shares, producing income on $20,852 capital at risk with break-even at $208.52 and total upside capped at $31.48.

Versus the CSP it requires stock ownership but trades some capital efficiency for defined upside participation.

As always…

Premiums change with volatility. Assignment risk exists. Returns assume holding to expiration. Liquidity impacts execution.

This is for educational purposes only—not a trade recommendation. Remember to always do your own due diligence and consult a financial advisor before making investment decisions.

Throttle Q&A

Do You Need to Actively Manage CSPs and Covered Calls Every Week?

No.

One of the biggest advantages is reduced emotional decision-making. Set them on businesses you like, collect premium, and let time work.

Adjustments (rolling up/out, unwinding calls) should only happen when your long-term conviction still aligns.

Is Missing a Big Rally with CSPs a Failure?

It’s the natural outcome of discipline.

If the stock runs away without assigning you, you still collected premium and avoided buying at inflated prices. You can adjust by selling closer strikes next time, but missing some moves is the trade-off for not overpaying.

Should You Roll Covered Calls Every Time the Stock Approaches the Strike?

Only roll (or unwind) if your long-term view on the business remains strong and the original exit target is no longer right.

Mindlessly rolling for extra credit can turn a planned, disciplined exit into indefinite holding or emotional decisions.

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Disclaimer

The information provided in this newsletter is sourced from reliable channels; however, we cannot guarantee its accuracy. The opinions expressed in this newsletter are solely those of the editorial team, contributors, or third-party sources and may change without prior notice. These views do not necessarily reflect those of the firm as a whole. The content may become outdated, and there is no obligation to update it.

This newsletter is for informational purposes only and does not constitute personal investment advice. It is not intended to address your specific financial situation and should not be construed as legal, financial, tax, or accounting advice, or as a recommendation to buy, sell, or hold any securities. No recommendation is made regarding the suitability of any investment for a particular individual or group. Past performance is not indicative of future results.

Options come with inherent risks. We strongly advise you to consult with a financial advisor before making any investment decisions, including determining whether any proposed investment aligns with your personal financial needs.