How He Makes 1% Per Week Selling Weekly Puts

Finance-focused summary (weekly cash-secured put strategy aiming ~1.04%/week)

Core objective / framing

• The guest aims to earn ~1.04% premium gain per week on the value of the trading account.
• Strategy: cash-secured puts (CSPs) with weekly expirations, typically:
  • Enter Monday mornings for Friday expiration
  • If the setup isn’t found early, enter Tuesday/Wednesday, expiring the following week
• Strong preference to avoid owning shares; the plan is typically for puts to expire worthless.

Why weekly puts

• Weekly options retain theta, which the guest notes “dissolves super quickly” later in the week (Wednesday–Friday).
• Qualitative reasoning:
  • Selling farther out increases total premium, but the guest prefers weekly because theta dominates and exposure time is shorter.
  • Example logic (qualitative): 2-week premium < 2× 1-week premium, 3-week premium < 3× 1-week premium, plus added event risk (e.g., macro/geopolitical like “US attacking Iran”).

Underlying selection & technical/trend filter (Ichimoku + moving averages)

• Watchlist approach:
  • Tech-tilted watchlist; the guest notes fewer “safe haven” stocks.
  • Cycles through roughly 80–90 stocks each Saturday using a fast scan.
  • Uses TradingView.

• Screening framework (multi-timeframe):

  1. 1-day timeframe quick confirmation
     • Uses Ichimoku Cloud + moving averages.
     • “Tradeable” conditions desired:
       • Price above the cloud
       • Cloud is green
       • Cloud has substantial thickness/area
     • “Not tradeable” examples if bearish:
       • Price below cloud
       • Cloud red
       • Blue conversion line below red baseline (sell signal)
       • Green lagging line below cloud
  2. If it passes the 1-day filter → check 4-hour, then 1-hour
     • Still requires supportive trend structure (if conflicts remain, it’s not tradeable).

• Example references:

  • UPST (Upstart): shown as not tradeable due to bearish Ichimoku structure (price below red cloud, conversion/base cross down, lag line below).
  • Paramount Skydance: shown as tradeable/approaching tradeable with:
    • green cloud
    • conversion line popping above baseline
    • lag line above cloud on shorter frames
  • The guest acknowledges long-term comfort may still depend on risk tolerance.

Risk and implied volatility (IV)

• Prefers higher implied volatility to support better premiums.
• Target range: ~60% to 80% IV
  • Avoid “too high,” but keep it high enough for decent premiums.
• IV varies by stock/sector.

Strike selection / “levels” (multi-MA resistance/support + projections)

• Strike selection is not primarily delta-based.
  • Delta is monitored to avoid extreme setups.
• The guest estimates “levels” using:
  • Moving averages (notably 50/100/200-day; also 5/10/20-day mentioned)
  • Linear regression with a 2-sigma channel
  • Optional: Bollinger Bands and “projection” to estimate likely upside/downside zones
• Strike logic:
  • Choose the put strike based on where the stock is expected not to pass within the next ~5 days.
• Illustrative level-to-strike idea (bearish example mentioned):
  • Stock around 13.34
  • Moving-average levels around 13.91 / 13.82
  • Downside support cited around 11.86
  • Possible bearish strike example: 1150 (intended to be below ~11.86)

Profit management / exits (mostly hold to expiry, but with a midweek rule)

• Main exit plan:
  • Let puts expire worthless (no traditional take-profit target).
• Early close rule (midweek):
  • Example: if total weekly premium is $1,000 across 5 trading days, that’s ~$200/day.
  • By Wednesday close (after 3 days), if about $800 of premium is captured, close early to lock gains.
  • Rationale: free up capital and roll into a new weekly with more theta remaining.

“When it goes against you”: 3 scenarios

1. Very close to strike
   • Use a limit order to exit around the price bought (attempt to avoid assignment).
2. Farther away
   • “Repair” by writing a weekly call (rules not fully detailed).

3. Stock drops substantially before you can manage

   • Uses a put-based stock repair strategy (put-based analog to stock repair).

   • Example discussed (with “OpenDoor” mentioned):

     • Assume shares bought at $8
     • Stock drops to $5
     • Sell two puts at $6.50
     • Buy one put at $8
     • Explanation (as described):
       • Assumes coordinated exercise/handling of short and long puts.
       • Goal: increase share count at a lower effective basis and reduce cost basis.
       • Claimed result: sell initial shares at original basis ($8) and then “buy twice as much” around $6.50, reducing cost basis by $1.50/share.
       • Example claims net debit of $4.

   • Notes:

     • Requires staying somewhat bearish and managing subsequent put legs.
     • Short put legs can sometimes be rolled, and shares may not be purchased (not guaranteed).

Rolling vs assignment

• The guest prefers not to manage often, but considers:
  • If asked whether he’d roll instead of taking assignment:
    • He may roll forward and adjust strike to improve credit.
    • However, weekly options have limited remaining theta to make rolling effective.
    • Guest estimate: roughly ~80% of the time when he rolls, he still ends up assigned.

Comparison to the “Wheel”

• The guest frames it as similar to the wheel only after assignment.
• Difference:
  • Many wheel traders pick underlyings via fundamentals (EPS/PE/business sentiment).
  • This approach picks underlyings via math + technicals (Ichimoku, moving averages, levels).

Portfolio / capital at risk constraints

• Hard cap: never risk more than ~50% of the account in a single week.
• If assigned multiple positions:
  • Avoid dropping below about ~20% of actual cash position remaining (varies by market regime).
• In bullish weeks, may allocate more.
• In bearish weeks:
  • may not write puts
  • might instead do calls/day trades.

Risk discussion / “worst case”

• Selling puts is acknowledged as high risk in theory (worst case: stock can go to zero).
• Mitigation: uses cash-secured puts (not naked).
• Personal risk profile rating: ~7/10 (between 6 on a good day and 8 on a bad day).

Performance metrics & results (2025 referenced)

• Two measurement methods:
  1. Premium gain percentage on account value
  2. Overall account balance return (impacted by owned shares possibly declining)
• Stated results:
  • 2025 premium percentage: ~1.28%
  • 2025 account balance return: ~just under 1% (about 0.9%–1.28% depending on metric)
• Explanation of discrepancy:
  • Owned stocks declined in value even if premium income was captured.
• Annualized example:
  • Brokerage account: ~30–40% annual return (attributed to premium income under the account balance metric).
• Smaller “bills” account:
  • Goal: ~$500/week
  • Account size: ~$50,000–$60,000
  • Guest notes 1% per week aligns with $500/week on ~$50k.

Explicit recommendations / cautions

• Recommendations:
  • Be “robotic”, avoid emotional trading, avoid FOMO.
  • Don’t copy others blindly—learn and adapt parameters to your own approach.
• Methodological emphasis:
  • Use structured level/indicator confirmation to choose strikes and underlyings.
• No explicit “not financial advice” disclaimer appeared in the provided subtitles.

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Tickers / instruments explicitly mentioned

• UPST (Upstart)
• OpenDoor (ticker not explicitly stated)
• Paramount Skydance (ticker not explicitly stated)
• Options / concepts mentioned:
  • weekly puts, weekly calls
  • cash-secured puts
  • stock repair strategy using puts
• Indicators / tools mentioned:
  • Ichimoku Cloud
  • moving averages
  • Bollinger Bands
  • Ichimoku lines: lagging/base/conversion
• Rate referenced:
  • “risk-free interest rate … ~3.6%” (used to estimate weekly contribution)

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Key numbers & targets

• Target: 1.04% premium gain per week
• IV preference: ~60%–80%
• Risk management:
  • Max 50% risk per week
  • Avoid dropping below ~20% cash buffer (varies)
  • Risk rating: ~7/10
• Interest rate math:
  • Risk-free rate referenced: ~3.6%
  • Estimated weekly “free money” contribution: 0.04% per week (computed as ~3.6/50)
• Performance (2025):
  • Premium metric: ~1.28%
  • Account balance metric: ~just under 1% (roughly 0.9%–1.28% depending on metric)
  • Annualized in trading account: ~30–40%
• Example stock repair numbers:
  • Long shares at $8, drop to $7/$5 (example varies by step)
  • Short puts at $6.50 (sell two)
  • Long put at $8 (buy one)
  • Net debit in example: $4

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Step-by-step methodology (consolidated)

Weekly schedule

• Saturday: scan/find setups; cycle watchlist.
• Monday morning (ideally): write weekly cash-secured puts expiring Friday.

Underlying selection (multi-timeframe trend validation)

• 1-day chart: check Ichimoku Cloud + moving averages
  • Prefer price above cloud + green cloud + thick cloud
• If OK → check 4-hour, then 1-hour for continued alignment.

Level/strike determination

• Identify key resistance/support levels using moving averages and regression/sigma channels.
• Choose put strike based on where price is not expected to go before expiration.
• Consider IV (prefer higher IV for premium).

Position sizing / weekly goal control

• Manage trades so realized weekly outcomes trend toward ~1.04% premium gain on account value.
• Mix outcomes across weeks/trades (some premiums higher, some lower) to meet the overall weekly target.

Exit rules

• Usually: hold to expiration so puts expire worthless.
• Early close: if by Wednesday close a large fraction of weekly premium is captured (example: ~$800 of $1,000), close early.

If the trade goes against you

• Near strike: try a limit exit around purchase price.
• Farther away: consider writing a weekly call.
• Large drop: use put-based stock repair (sell short puts at an intermediate level; buy an anchor put near original purchase price; may rely on exercise/coordination to adjust cost basis).
• Rolling is possible, but the guest estimates it may still lead to assignment about ~80% of the time.

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Presenters / sources

• Josh Walker (guest; options strategy presenter)
• John (host/interviewer; name shown in subtitles: “Thank you John”)

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