Weekly Watch

I’m not watching anything this week, I’m on vacation lol.

Thought Throttle

It is such a repeated phrase we constantly hear:

"Only sell puts on stocks you actually want to own."

It's repeated so often that it's easy to take for granted or tune it out.

Please don't.

It might be the single most important rule in this entire strategy.

Most beginners choose a strike because the premium looks attractive or the delta seems right. They click "Sell," collect the credit, and move on.

They never stop to ask the question that actually matters:

"Would we be happy buying 100 shares of this company at this price?"

I skipped that question plenty of times myself when premiums looked too good.

Then assignment happened.

Suddenly, I wasn't an options seller anymore—I was a super, super unenthusiastic shareholder.

We begin hoping the stock recovers instead of happily owning it.

Every decision becomes emotional because the original investment was never something we truly wanted.

There's a much simpler way.

Before every cash-secured put, pretend there is no option.

Ask ourselves:

"Would we buy 100 shares of this company today at this price?"

If the answer is yes, sell the put.

If the answer is no, move on.

We don't need hundreds of tickers. We don't need to chase every high-IV opportunity.

We just need a small watchlist of companies we'd genuinely be excited to own at prices we'd gladly pay.

If we're assigned, great—we bought a quality company at a discount we accepted ahead of time.

If we're not assigned, great—we collected premium and can try again next month.

When done right, either outcome is a win.

The market will always tempt us with premiums on stocks we'd never buy outright.

The discipline to keep saying no is the super-power.

If we wouldn't buy the shares, don't sell the put.

It may be the oldest lesson in options selling.

It's also one of the easiest to forget.

Quote(s) I Like

Throttle Q&A

Dangers of Compounding

While compounding is often celebrated for its wealth-building power, it can also work against you when returns are negative. Just as gains can build on gains, losses can compound too.

Let’s say you have $100,000 and lose 20%—your account drops to $80,000. To get back to $100,000, you now need a 25% gain, not just 20%. That’s compounding working against you—each loss requires a disproportionately larger gain to recover.

This further points to the crucial nature of risk management and selecting high-probability trades.

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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.