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 Watch

• Tariffs & Trade: New tariff headlines could create more market swings. If volatility picks up, we may see better opportunities to sell puts on quality companies at lower prices.

• Small Stocks: Smaller companies have started outperforming lately. I'm watching to see if this is the start of a longer trend or just a short-lived rally.

• Market Volatility: Summer trading is often quieter, but unexpected news can quickly increase volatility. Those spikes often create some of the best premium-selling opportunities.

Thought Throttle

Most new traders discover options through hype—screenshots of 300%, 500%, or even 1,000% wins on meme stocks and 0DTE trades.

Steer clear.

There is another side to the options market. A side not propped up on straight gambling (if you want to gamble, blackjack and college football are much more fun).

Every option contract has a buyer and a seller. While buyers are paying for time and hoping for explosive moves, sellers collect premium upfront and let time decay work in their favor. Our goal isn’t the home runs. It’s to build real wealth over time, the right way.

What is Compounding?

Compounding is simply earning returns on your previous returns. You generate a gain, then put that gain back to work so it can produce even more gains.

Small, consistent winnings stack on top of each other. And time is the most important ingredient—the earlier you start and the longer you stay disciplined, the more potential you have.

How Option Sellers Harness Compounding

As option sellers, we have a built-in advantage. We sell premium on quality stocks or ETFs we wouldn’t mind owning, collect the credit immediately, and reinvest those premiums into the next trade.

Even a conservative 1.5% per month on a starting $10,000 account adds up dramatically with reinvestment.

Take a peek at this chart:

After Year 1, we would have collected roughly $1,950 in premiums. By the 5th, the account value has grown to approximately $24,400.

Notice how the biggest gains don't happen in the beginning—they happen after years of consistency. That's the true power of compounding.

These numbers come from steady premium collection rather than needing massive stock moves. You often profit when the market simply stays calm or moves less dramatically than buyers expected.

Time decay becomes your ally instead of your enemy.

Here are some common mistakes that destroy compounding:

• Chasing quick home runs with high-risk naked options or far out-of-the-money lottery tickets

• Pulling money out after a few wins (or losses) instead of letting the process run

• Trying to time the market or over-trading instead of running a disciplined, repeatable strategy

The Takeaway

Compounding favors patience and consistency above all else. By selling options on solid assets, reinvesting the premiums you collect, and staying in the game long-term, you turn small monthly edges into significant wealth.

We are not trying to get rich next week. We focus on quality companies, use options to enhance our investing, and prioritize steady singles and doubles. Start early, remain disciplined, and let time do the heavy lifting. The longer you stick with it, the more unstoppable the results become.

Quote(s) I Like

Trade Mechanics

Let’s look at a Cash-Secured Put opportunity in Tesla Inc (TSLA).

The strike below represents roughly a ~26-delta put expiring August 21st, 2026.

If we wanted to buy Tesla Inc (TSLA) at a discount, we could sell the $380 August 21st, 2026 Put for about $11.65 in premium.

That represents roughly a 3.16% return on risk over the next 52 days, and about a 12.4% discount from the current price if assigned.

If the stock remains above $380 through expiration, the option expires worthless and the premium ($1,165) is kept as income. If the stock falls below the strike, assignment would result in purchasing shares at an effective cost basis of $368.35.

Thanks for reading, best of luck!

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.

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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.