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

• Iran, Iran, Iran. Stocks struggle to find a direction.

• Silver and Gold had a day.

• A week out from the Fed meeting. A rate cut is super unlikely.

• The VIX hit its highest level in a year.

• Amazon is looking to raise money for AI investments.

• What is a Long Jelly Roll?

“Good-To-Know’s”

When a trader sells a $95 put and collects $2 in premium, the strike price suggests they are committing to buy the stock at $95.

But the premium received lowers the real, or effective, cost basis.

If assignment occurs, the effective purchase price becomes $93 per share ($95 strike - $2 premium received).

The same logic applies in the other direction for covered calls. If we sell a covered call at a $105 strike and collect $2 in premium, our effective sale price becomes $107 ($105 strike + $2 premium received).

Understand the real economics of the trade—understand the effective purchase (or sale) price.

Quote(s) I Like

Thought Throttle

Never sell puts on stocks that we wouldn’t actually want to own.

Obvious, yes, but it is the single most important rule for option sellers. When selling a put, we are agreeing to potentially purchase 100 shares of the underlying stock at the strike price.

If the stock falls below that strike at expiration, assignment means we will be obligated to buy.

This outcome should not feel like a mistake or a failure of the trade. It should be an acceptable result from the beginning.

If we would be uncomfortable owning the stock, we should be uncomfortable entering the trade.

This comes back to the basic purpose of a cash-secured put.

For those who don’t know, a cash-secured put (CSP) is a strategy where a trader sells a put option while keeping enough cash available to purchase the shares if assigned.

For example:

A stock is trading at $100.

We sell the $90 strike put option and collect $2 in premium.

Two outcomes can occur:

• If the stock stays above $90, the option expires worthless and we keep the premium.

• If the stock falls below $90, we may be assigned and required to purchase the shares.

If assigned, we would buy the stock at the strike price—with a lower effective purchase price.

When using cash-secured puts, we need to fight the temptation to simply chase premium.

Sometimes a trade looks great because the premium is high. But there’s usually a reason for that.

The stock tends to move around a lot.

If the stock falls and we’re assigned, we could suddenly find ourselves owning a company we do not believe in at all.

That turns what was supposed to be an income strategy into a speculative one.

Set up the trade properly, and…

• If the option expires worthless, we keep the premium.

• If we are assigned, we acquire shares of a company we were comfortable owning in the first place.

Either outcome should make sense before the trade is placed.

This cannot be stressed enough.

Trade Mechanics

Let’s take a look at an opportunity for a CSP in DraftKings Inc. (DKNG).

The strike below represents roughly a ~25-delta put expiring April 17, 2026 (38 DTE).

If we wanted to buy DraftKings (DKNG) at a discount, we could sell the $22.50 April 17 put for about $0.80 in premium. With shares trading near $25.14, that represents roughly a 3.69% return on risk over 38 days, and about a 13.7% discount from the current price if assigned.

If the stock remains above $22.50 through expiration, the option expires worthless and the premium is kept as income. If the stock falls below the strike, assignment would result in purchasing shares at an effective cost basis of $21.70.

Keep in Mind…

Premiums fluctuate with volatility, earnings cycles, and investor sentiment. Returns assume smooth expiration and no early assignment. Wider spreads may appear on less-liquid strikes.

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

What Moves a Stock Price More, Company-Specific Factors or the Market?

While company news can certainly move a stock, most price movement is actually influenced by broader forces.

The research varies slightly, but it is estimated that roughly 70%–90% of stock movement is tied to the overall market and the industry it operates in. That is a comfortable majority.

For example, if the technology sector is selling off broadly, even strong companies within that sector may decline alongside their peers.

This is why diversification and sector awareness matter. A good company can still experience volatility if the broader market or its industry faces pressure.

I Have $10,000 to My Name. Can I Become a Millionaire With Options?

It depends on what you mean.

In 25 years? Absolutely, it’s possible.

In 1 year? Highly, highly, highly unlikely.

Overnight? No. Just no.

To get from $10,000 to $1,000,000, we would need to 100x our money (assuming no further contributions). This is a 9,900% return.

I don’t want to say 9,900% is “impossible” in one day, but it might as well be. Forget about it.

If we tried for this kind of return in a year, we would need about a 1.85% return per day, or a ~47% return each month. I cannot stress enough how unlikely this also is.

However, if we allow for time to do its thing, millionaire status becomes an obtainable goal. Taking the 25-year route, we would need annual returns of ~20.3%, or about 1.55% per month.

Much more realistic, especially considering a common monthly target for option sellers is 2% per month. It can be done.

If this amount of time is disheartening, remember that this assumes no additional contributions on top of the $10,000. More contributions = less time required.

Also, the time is going to pass anyway. Isn't it best to let it work for us?

Don’t try shortcuts for a decade only to realize you’d have reached your goal if you had just stayed the course.

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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.