The Premium Collector

Pocket cards

The rules you need at the keyboard.

Read before every trade. The scanner applies the same rules to live data. The book is the rest of the course.

Put card

Sell a cash-secured put

  1. Confirm the full cash to buy 100 shares is set aside.
  2. Pick an underlying you’d happily own.
  3. Strike below price, ~0.20–0.30 delta, 30–45 DTE.
  4. Sell to Open, 1 contract, limit near midpoint.
  5. Journal it. Set 50%-profit and 21-day alarms.
  6. Expires worthless → repeat. Assigned → you own shares; sell a covered call.

Call card

Sell a covered call

  1. Confirm you hold 100 shares.
  2. Strike ABOVE your cost basis, ~0.30 delta, 30–45 DTE.
  3. Sell to Open, 1 contract, limit near midpoint.
  4. Journal it. Set 50%-profit and 21-day alarms.
  5. Expires worthless → repeat. Called away → back to cash; sell a put.

Stay alive

  1. 1Size for a crash that arrives tomorrow.
  2. 2High premium ALWAYS means high risk. No exceptions.
  3. 3Only sell puts at strikes where assignment would make you happy.
  4. 4Take profits early; greed for the last dollar reverses.
  5. 5Prefer defined-risk spreads over naked positions.

Default recipe

  • Name you would actually own. Broad index funds first.
  • Expiration: 30–45 days out.
  • Strike: about 0.20–0.30 delta.
  • Close at 50% profit and reset.
  • At 21 days to expiration, decide: close, roll, or hold.

Pre-trade

  1. I would be happy to own this name at this strike.
  2. The cash (put) or 100 shares (call) are actually in the account. Covered or secured, not naked by accident.
  3. A 30% drop does not threaten the account.
  4. Expiration is about 30–45 days out.
  5. Delta is in range (0.20–0.30 for income).
  6. No earnings or known event before expiration, or I accepted that risk on purpose.
  7. Limit order near the midpoint. 50% profit and 21-day alarms set.

Strike by goal

GoalDeltaTrade-off
Maximum safety, rare assignment0.10–0.15Small premium; lots of trades expire worthless
Balanced income (default)0.20–0.30The sweet spot most sellers live in
Aggressive income0.35–0.45Fat premium, frequent assignment, bigger swings
You actually WANT the shares0.40+High chance of being assigned, by design

Common mistakes

  • Selling on margin without the cash (accidental naked)
    Confirm cash-secured or covered before every order
  • Chasing fat premiums by selling near-the-money
    Respect the delta range; fat premium = fat risk
  • Rolling a broken position over and over
    Set a maximum number of rolls, then accept the outcome
  • Going too big because it felt easy
    Size for the crash, not the calm
  • Holding winners to the last penny
    Take ~50% profit and reset
  • Selling premium into dead-calm volatility
    Wait for normal-or-higher volatility to be paid properly

Glossary

The words you need at the scanner.

Assignment
You have to honor the contract: buy shares (short put) or deliver shares (short call).
Cash-secured put
Sell a put with the full cash set aside to buy the shares if assigned. The beginner way to sell puts.
Covered call
Sell a call against 100 shares you already own. Collects rent. Caps upside.
Delta
Rough odds the option finishes in the money. Seller’s main dial. Income lives at 0.20–0.30.
DTE
Days to expiration. Sellers favor 30–45.
IV / HV
Implied vol versus realized vol. Above 1 means the market is paying you extra to sell.
Naked
Selling without the shares (call) or full cash (put). High or unlimited risk. Not for this app.
OTM
Out of the money. No intrinsic value yet. The zone a seller usually sells into.
Premium
The option’s price. One contract is 100 shares, so a $2.00 premium is $200.
Theta
Daily time decay. The seller’s paycheck.
The Wheel
Cycle cash-secured puts and covered calls. Collect premium in both directions.
Vega
Sensitivity to volatility. When fear rises, premiums rise. So does risk.
Educational only. Not advice. Options can lose more than you expect. Confirm every number at your broker before you sell.