When selling cash-secured puts (or covered calls), large dollar premiums are enticing. Is a $17.00 premium better than an $11.00 premium? How about is a $20.00 premium better than that $17.00 premium? Before you answer “yes, of course”, don’t forget to factor in the time to expiration. Typically, shorter-dated options generate the highest annualized returns. In this article, a real-life example with Invesco QQQ Trust (Nasdaq: QQQ) will be analyzed to confirm this principle.
Real-life example with QQQ
- 2/6/2026: QQQ trading at 602.28
- 2/6/2026: The 3/13/2026 $590.00 put shows a bid price of $11.71
- 2/6/2026: The 4/17/2026 $590.00 put shows a bid price of $17.10
- 2/6/2026: The 5/15/2026 $590.00 put shows a bid price of $20.67
- Are these listed worst-to-best or best-to-worst? Let’s see.
QQQ put calculations using the BCI Trade Management Calculator (TMC)
- Red oval: Days-to-expiration (DTE) for each contract
- Yellow field: Breakeven (BE) price points: larger premiums have the lowest BE prices
- Brown field: Initial returns: Shorter dated options have the lowest initial returns, before annualizing
- Pink field: Initial annualized returns: Shorter-dated options typically have the highest annualized returns
Discussion
When evaluating option premium returns, in addition to the premium dollar amount, we must also factor in time-to-expiration. The best way to accomplish this is to annualize our returns. This will allow us to compare “apples-to-apples” when making our trade decisions. Our BCI Trade Management Calculator (TMC) will simplify and achieve these computations for us.
The Blue Collar Investor’s Guide to:
Exit Strategies for Covered Call Writing and Selling Cash-Secured Puts
This book will detail how to enter, manage and calculate trade adjustments for all market conditions. After we select the underlying security and sell the corresponding option, we immediately move into position management mode. There are over 20 exit strategies defined, as well and when and how to implement these plans.
Your generous testimonials
Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to publish several of these testimonials in our blog articles. We will never use a last name unless given permission:
Alan & Barry,
Loved last week’s PCP (Wheel) Strategy lessons.
Alan interviewed on the Financial H.E.A.T podcast
1. MoneyShow Masters Symposium Las Vegas
Tuesday July 21, 2026
Caesars Palace Hotel, Las Vegas
Title: The Put-Call-Put (PCP) or Wheel Strategy
Subtitle: Generating cash flow & buying shares at a discount using covered call writing and cash-secured puts
Description:
Selling stock options is a proven way to lower our cost-basis and beat the market on a consistent basis. Two such low-risk strategies are covered call writing and selling cash-secured puts. This presentation will detail how to incorporate both strategies into one multi-tiered option-selling strategy where we either generate cash-flow or buy stock at a discount. I refer to this as the Put-Call-Put (PCP) Strategy, also referred to as the wheel strategy.
The basics and pros and cons are discussed as well as a real-life example and introduction into the BCI Trade Management Calculator (TMC). This seminar is appropriate for those who look to generate modest, but repeatable, returns which will enable us to beat the market on a consistent basis while focusing on capital preservation.
2. Mad Hedge Investor Summit
Wednesday September 16, 2026
12 PM ET – 1 PM ET
The Collar Strategy: Covered Call Writing with Protective Puts
Protecting covered call trades from catastrophic share loss
Protect our covered call trades by purchasing protective puts. This results in lower risk transactions, with lower, but still significant option returns. This is the strategy Bernie Madoff pretended to use. He called it the split strike conversion strategy, but it was simply a collar. The covered call sets a max gain and the protective put guarantees a maximum loss.
Topics discussed
- What is the collar strategy?
- Uses for the collar
- Entering a collar trade
- Option basics for calls
- Option basics for puts
- Real-life example with NVDA
- What is an option-chain?
- Real-life example using the BCI Trade Management Calculator (TMC)
- Strategy pros & cons
- Event offer
- Q&A
Registration link to follow.
3. Toronto Money Show
September 24 – 25, 2026
MaRS Center, Toronto Canada
4. Orlando Money Show
October 5 – 7, 2026
Hilton Orlando Lake Buena Vista
Details to follow.
5. American Association of Individual Investors: NYC Chapter
Date and time to be confirmed.
6. Triple Edge Investing Summit: Technical Analysis • Options Strategies • ETF Mastery
Saturday January 23, 2027
Zoom presentation
All-day paid event
All-day event hosted by 3 experts:
- Dr. Alan Ellman (options)
- Dr. Eric Wish (technical analysis)
- Les Masonson (ETFs)
Hosted by TraderLion University
Details to follow.
Begin additional segments text here (like testimonials, events, etc.)
