Options – LowerLow

Trade: Sold 4 HOOD $90 7/25 PUT for $1740 (4.8% ROI)

Selling 4 HOOD $90 puts expiring July 25th generates a 4.8% return in 21 days, capitalizing on strong premium, technical support above the strike, and a favorable risk/reward profile for short-term income.

A good time to sell a PUT is when the stock has dipped, as the premium tends to be higher.

Reasons

Attractive Premium and Risk/Reward Profile: The $4.35 premium per contract (totaling $1,740 for 4 contracts) represents a 4.8% return on $9,000 at risk over a 21-day period, which annualizes to a highly competitive yield compared to other short-term opportunities. The strike price of $90 is below the current market price of $93.91, providing a buffer against moderate downside moves.
Technical and Market Context: Robinhood (HOOD) has shown relative strength, trading above the $90 strike, and recent price action suggests support in the high $80s to low $90s range. The broader market environment remains constructive, with volatility elevated enough to keep option premiums attractive, but not so high as to signal imminent risk of a sharp selloff.
Probability and Delta Considerations: The put’s delta of 0.37 indicates a roughly 37% probability of finishing in the money, meaning there is a statistically favorable chance the option will expire worthless and the full premium will be retained. The risk of assignment is acceptable given the willingness to own HOOD at an effective purchase price below current levels.

Entry

On July 3, 2025, we sold 4 $90 PUT option (CASH SECURED) on Robinhood (HOOD) that expired on July 25, 2025. The stock was trading at $93.91, and we collected $1,740 in premium.

ASSET
Symbol	HOOD
Option Type	PUT
Strike Price	$90
Expiration Date	25 Jul 2025
ENTRY
Date	3 Jul 2025 09:00 AM PST (Thu)
Stock Price	$93.91
Delta	0.37
Option Price (Sold At)	$4.35
Quantity	4
Projected Holding Period	21 days
Projected Return	4.8% ($435/$9,000)
Projected Annualized Return	127.1%

P&L

Profit Potential

Updates

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Exit

This trade is still on-going.

EXIT
Date
Stock Price
Delta
Option Price (Acquired At)
PROFIT & LOST
Realized Profit/Loss
Return
Annualized Return

Trade: Sold TSLA $300 7/25 PUT for $1225 (4.1% ROI)

We like selling PUTs on TSLA because its high volatility consistently offers excellent premium income, making each trade worth the risk.

This trade represents a 4.1% ROI in 21 days (100.5% annualized) opportunity.

Tesla, Inc. Common Stock is estimated to report earnings on 07/22/2025.

If you are new to option trading, please check out Option Basics.

Reasons

Strong Technical Support Near $300: Tesla’s stock has established significant support levels just below $300, with accumulated volume support at $284.70 and $272.20. These levels have historically attracted buyers, making a sharp breakdown less likely in the near term.
Recent Downside Already Priced In: The stock has recently experienced a notable decline, with a sell signal issued from a pivot top in late May and a drop of over 13% since then. Current technical indicators suggest the worst of the short-term selling may be behind us, and the stock is now closer to support than resistance.
Premium Collected Is Attractive: Selling the $300 put for $12.25 generates a solid premium, offering a cushion against further downside. With Tesla trading near $315 at the time of the trade, the breakeven is effectively reduced to around $287.75, which is just above a major support zone.

Entry

On July 3, 2025, we sold a $300 PUT option (CASH SECURED) on Tesla (TSLA) that expired on July 25, 2025. The stock was trading at $313, and we collected $1,225 in premium.

ASSET
Symbol	TSLA
Option Type	PUT
Strike Price	$300
Expiration Date	25 Jul 2025
ENTRY
Date	3 Jul 2025 07:25 AM PST (Thu)
Stock Price	$313
Delta	0.35
Option Price (Sold At)	$12.25
Projected Holding Period	21 days
Projected Return	4.1% ($1,225/$30,000)
Projected Annualized Return	100.5%

P&L

Profit Potential

Updates

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Exit

This trade is still on-going.

EXIT
Date
Stock Price
Delta
Option Price (Acquired At)
PROFIT & LOST
Realized Profit/Loss
Return
Annualized Return

Trade: Sold MSTR $375 7/25 PUT for $1400 (3.7% ROI)

We like selling PUTs on MSTR because its high volatility consistently offers excellent premium income, making each trade worth the risk.

If you are new to option trading, please check out Option Basics.

Reasons

This trade offers a compelling risk-reward setup. We’re aiming to generate $1,400 in premium over 3 weeks, which is a 3.7% return on a $37,000 cash-secured PUT — a strong short-term income opportunity. With a delta of 0.35, there’s about a 65% probability the option will expire worthless, allowing us to keep the full premium.

Even in the worst-case scenario, we’d be assigned 100 shares of MSTR at an effective price of $361 ($375 strike minus $14 premium), which is a solid entry point for a long-term hold. We can then transition into the wheel strategy by selling covered CALLs, continuing to reduce our cost basis while generating ongoing income.

Entry

On July 2, 2025, we sold a $375 PUT option (CASH SECURED) on MicroStrategy (MSTR) that expired on July 25, 2025. The stock was trading at $379.76, and we collected $1,039.32 in premium.

ASSET
Symbol	MSTR
Option Type	PUT
Strike Price	$375
Expiration Date	25 Jul 2025
ENTRY
Date	2 Jul 2025 07:05 AM PST (Wed)
Stock Price	$384.5
Delta	0.35
Option Price (Sold At)	$14
Projected Holding Period	22 days
Projected Return	3.7% ($1,400/$37,500)
Projected Annualized Return	83.7%

Stock Price Trend

Option Price Trend

P&L

Potential Profit & Loss

Updates

25/7/2 (Wed)- We entered the trade on July 2nd. By the close, the stock had risen from $384 to $402 (⬆️ +4.7%). The PUT option price dropped from $14 to $9 (⬇️ -3.5%), and we’re currently sitting on a $500 profit (⬆️ +37%).

Exit

This trade is still on-going.

EXIT
Date
Stock Price
Delta
Option Price (Acquired At)
PROFIT & LOST
Realized Profit/Loss
Return
Annualized Return

Trade: Sold MSTR $370 7/3 PUT for $1040 (2.81% ROI)

We like selling PUTs on MSTR because its high volatility consistently offers excellent premium income, making each trade worth the risk. The large price swings boost option prices, allowing us to collect more upfront while managing risk with smart strike selection.

If you are new to option trading, please check out Option Basics.

Risks

The main risk of this trade is that if MSTR drops below $370, we could be assigned and required to buy 100 shares at that price — a $37,000 capital commitment. While we’d still keep the premium, we’d be exposed to potential losses if the stock keeps falling.

This strategy works best with strong underlying stocks that we’re comfortable owning long-term, like MSTR. If assigned, we not only keep the premium but also acquire the stock at an effective discount — making it a smart way to build a position in quality companies.

Entry

On June 12, 2025, we sold a $370 PUT option (CASH SECURED) on MicroStrategy (MSTR) that expired on July 3, 2025. The stock was trading at $379.76, and we collected $1,039.32 in premium.

ASSET
Symbol	MSTR
Option Type	PUT
Strike Price	$370
Expiration Date	03 Jul 2025
ENTRY
Date	12 Jun 2025
Delta	0.30
Option Price (Sold At)	$10.40
Projected Return	2.81% ($1,040/$37,000)

Updates

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Exit

We then closed the position early on June 27, 2025, by buying it back for $155.68. That gave us a net profit of $883.64 over just 15 days, with minimal risk. This trade gives an annualized return of 74.7%

EXIT
Date	27 Jun 2025
Option Price (Aquired At)	$1.55
Delta	0.15
PROFIT & LOST
Realized Profit/Loss	$885
Return	2.39% ($885/$37,000)
Annualized Return	74.7%

Why Selling CALL Options?

Selling CALL options is a popular strategy for generating extra income, especially if you already own the stock. Known as a covered CALL, this approach lets you collect a premium upfront by agreeing to sell your shares at a set price (the strike price) if the option is exercised.

It’s a great way to earn passive income while holding a stock, particularly in sideways or slow-moving markets. If the stock stays below the strike, the option expires worthless and you keep both the shares and the premium. If it rises above the strike, you still profit — but you sell the stock at the agreed price.

This strategy works best with stocks you’re willing to sell and can be a smart way to boost returns from long-term holdings.

Why Selling PUT Options?

Overview

Learn more about PUT options in What is a PUT option? and How to sell a PUT option.

Selling a PUT option is a great way to earn income while potentially buying a stock you like at a discount. When you sell a PUT, you’re agreeing to buy 100 shares of a stock at a specific price (called the strike price) by a certain date — but only if the stock falls below that price. In return, you get paid a premium up front.

For example, if you sell a $100 PUT on a stock and collect a $3 premium, you’re agreeing to buy it at $100 — but your real cost would be $97 ($100 – $3). If the stock stays above $100, the option expires worthless and you keep the full $3. If it drops below $100, you’ll be assigned and buy the stock — but you’re still better off than if you had bought it at full price.

This strategy works best with stocks you actually want to own, and it’s a smart way to build positions slowly while earning passive income along the way. Just make sure you have enough cash to buy the stock if assigned — that’s why it’s called a cash-secured PUT.

Risks

Assignment risk: If the stock drops below the strike price, you must buy the shares at the agreed price, even if the stock keeps falling.

Capital requirement: You need enough cash to buy 100 shares per contract — this strategy ties up significant capital.

Stock-specific risk: If the company suffers bad news, the stock could fall far below your strike, resulting in a larger unrealized loss.

Tips

This strategy is best used on strong, fundamentally sound companies that you’d be happy to own long term. If you’re comfortable holding the stock, then being assigned isn’t a loss — it’s just a chance to buy shares at a discount and get paid while waiting.

The Wheel Strategy: A Step-by-Step Guide to Generating Income with Options

The wheel strategy is a popular options trading technique designed to generate consistent income by cycling between selling cash-secured puts and covered calls.

The process starts with selling a cash-secured put on a stock you’re willing to own; if the option is exercised, you purchase the stock at the strike price. Once you own the shares, you then sell a covered call against them, collecting additional premium income.

If your shares are called away, you simply start the process over by selling another cash-secured put, effectively “turning the wheel” and repeating the cycle.

This strategy is favored by income-focused investors who want to potentially acquire stocks at a discount while earning regular option premiums. The wheel strategy can help reduce the cost basis of stock ownership and provide steady returns, but it does require active management and carries risks—especially if the stock’s price drops significantly after assignment. To maximize effectiveness and manage risk, it’s important to choose fundamentally strong, liquid stocks and carefully select your strike prices. With the right approach, the wheel strategy can be a powerful addition to your investing toolkit.

How to sell a PUT option in Fidelity?

We are using Fidelity in this example.

First, you want to go to the Research & Quotes page for your stock. On the page, click on the option chain (representing by the link icon) link as shown below.

On the option chain page, you can select the expiration dates that you are interested in.

On the right side, there are PUT options.

To sell a PUT option, you can click on the Bid price.

You should then be shown a trade popup window where you can provide additional information. Please make sure it is a “Sell To Open” action for entering a trade.

Selling Options Instead of Buying!

Overview

Most new traders start by buying options, hoping for big gains with small investments. But the truth is, option buyers have to be right fast — about both direction and timing. That’s why many experienced traders prefer to be on the selling side, where the odds are stacked more favorably.

When we sell options, we become the “house.” We’re betting that the option will expire worthless, allowing us to keep the premium as profit. This approach often has a high probability of success — usually 60–85% — depending on the strike price and expiration. Time is on our side, because every day that passes reduces the option’s value (thanks to time decay).

Example

Let’s say a stock is trading at $105, and we sell a $100 PUT for $2. That means we collect $200 upfront (1 contract = 100 shares). If the stock stays above $100 by expiration, the PUT expires worthless, and we keep the full $200. Even if the stock drops a little, we still win — because we only get assigned if it falls below $100. That gives us a buffer and a higher chance of profit than buying a CALL or PUT.

Conclusion

By selling options, we’re getting paid to wait, and we only take action if the price moves dramatically. It’s a smart way to generate steady income with controlled risk, especially when done on quality stocks we don’t mind owning.

How to Read an Option Symbol

Options trading can seem complex at first, but once you learn to decode the lingo, it becomes much easier.

CALL Example

When you see an option label like “AAPL $210 7/19 CALL”, it might look like a jumble of numbers and letters—but each part carries important meaning. Here’s how to read it:

AAPL – This is the ticker symbol for Apple Inc., the underlying stock.
$210 – This is the strike price. It’s the price at which the option buyer has the right to buy 100 shares of AAPL.
7/19 – This is the expiration date. The option is valid until July 19. After that date, it expires and becomes worthless if not exercised.
CALL – This indicates the type of option. A CALL option gives the buyer the right (but not the obligation) to buy the stock at the strike price.

Example: If AAPL is trading at $220 before July 19, this $210 CALL is in-the-money, since the buyer can buy the stock at $210 and immediately sell it at $220, locking in a $10 per share gain (minus the premium paid). If AAPL stays below $210, the option expires worthless.

PUT Example

Let’s break down what “HOOD $90 7/25 PUT” means, step by step:

HOOD – This is the ticker symbol for the underlying stock, in this case, Robinhood Markets, Inc.
$90 – This is the strike price. It’s the price at which the buyer of the PUT option has the right to sell 100 shares of HOOD.
7/25 – This is the expiration date, meaning the option contract is valid until July 25th. After that date, it expires.
PUT – This tells us the type of option. A PUT option gives the buyer the right (but not the obligation) to sell the stock at the strike price ($90).

Example: If HOOD is trading at $85 before July 25, the buyer of this PUT can sell it at $90, making a $5 profit per share (minus the premium paid). On the other hand, if HOOD stays above $90, the option will likely expire worthless.

Understanding each part of the contract helps you make better decisions when buying or selling options. Always pay attention to the strike, expiration, and type—these details determine how the option behaves in the market.