Print these

Tape them next to the screen.

The everyday companion. Read before every trade. The scanner applies the same rules to live data; these pages keep the rules in your head.

Pocket card A

Sell a cash-secured put

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

Pocket card B

Sell a covered call

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

The five commandments of staying alive

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

Default recipe

Underlying you’d genuinely be happy to own (broad index funds are ideal).
Expiration: 30–45 days out.
Strike: ~0.20–0.30 delta.
Alarm at 50% profit → close and reset.
Alarm at 21 days to expiration → decide to close, roll, or hold.

Pre-trade checklist

I would be genuinely happy to own this underlying at this strike.
The cash (put) or the 100 shares (call) are actually in my account — covered/secured, not naked by accident.
This position survives a 30% drawdown without threatening my account.
Expiration is roughly 30–45 days out.
Delta is in my chosen range (0.20–0.30 for income).
No earnings or major known event lands before expiration (or I have accepted that risk on purpose).
I will use a limit order near the midpoint, and I have noted my 50%-profit and 21-day alarms.

Strike by goal

Goal	Delta	Trade-off
Maximum safety, rare assignment	0.10–0.15	Small premium; lots of trades expire worthless
Balanced income (default)	0.20–0.30	The sweet spot most sellers live in
Aggressive income	0.35–0.45	Fat premium, frequent assignment, bigger swings
You actually WANT the shares	0.40+	High chance of being assigned — by design

Four animals at a glance

Trade	View	Risk	When
Covered Call	Neutral / mildly up	You miss extra upside (capped gains)	You own shares and want rent
Cash-Secured Put	Neutral / mildly up	Forced to buy a stock that keeps falling	You want to own it cheaper
Naked Call	Bearish	Theoretically unlimited loss	Almost never — use a spread
Naked Put	Bullish	Large, leveraged loss if the stock craters	Only if experienced and funded

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

Assignment: The moment a seller is obligated to honor the contract — to buy shares (short put) or deliver shares (short call). Usually automatic, often over a weekend.
At-the-money (ATM): An option whose strike is right at the current stock price.
Breakeven: The stock price at which a position makes neither profit nor loss. For a cash-secured put, it is the strike minus the premium collected.
Call option: The right to BUY 100 shares at the strike before expiration. Call buyers are bullish.
Cash-secured put: Selling a put while setting aside the full cash to buy the shares if assigned. The friendly, beginner-appropriate way to sell puts.
Covered call: Selling a call against 100 shares you already own. Collects income; caps upside.
Credit: Cash you receive when you sell. “Selling for a credit” means money comes in.
Delta: Roughly, how much an option’s price moves per $1 move in the stock; also a rough probability of finishing in-the-money. A seller’s odds dial.
Expiration (DTE): The deadline of the contract. Sellers favor 30–45 days to expiration.
In-the-money (ITM): An option with intrinsic value: a call below the stock price, or a put above it.
Naked (uncovered): Selling an option without the offsetting shares (call) or full cash (put). High or unlimited risk; not for beginners.
Out-of-the-money (OTM): An option with no intrinsic value yet — the safe zone a seller usually sells into.
Premium: The price of the option; the cash the seller collects and the buyer pays. One contract = 100 shares, so a $2.00 premium is $200.
Put option: The right to SELL 100 shares at the strike before expiration. Put buyers are bearish or buying insurance.
Rolling: Closing an existing short option and opening a new one further out in time (and possibly a different strike), ideally for a net credit.
Strike price: The agreed price at which shares change hands if the option is exercised.
Theta: Time decay — the daily erosion of an option’s value. The seller’s paycheck.
The Wheel: The strategy of cycling cash-secured puts and covered calls to collect premium continuously.
Vega: Sensitivity to volatility. When volatility rises, premiums rise; sellers are paid more (but risk is higher).
Volatility risk premium: The persistent tendency of options to be priced for more movement than usually occurs — the structural edge sellers harvest.