I favor cash-secured put trades in volatile, bearish and volatile market conditions. I also use puts to enter covered call trades (PCP, Put-Call-Put or “wheel” strategy). In this article, real-life examples with Celestica Inc. (NYSE: CLS) will be analyzed to demonstrate how to enter such trades with initial and final calculations.
Real-life example 5-day trades with CLS from 9/8/2025 – 9/12/2025
- 9/8/2025: CLS trading at $250.77
- 9/8/2025: The 9/12/2025 $225.00 put strike had a bid price of $0.90
- 9/8/2025: The 9/12/2025 $230.00 put strike had a bid price of $1.37
- 9/12/2025: At contract expiration, CLS closed at $241.77, down substantially from the price at trade entry but well above both OTM put strikes
CLS 3-month comparison price chart with the S&P 500 at trade entry
Initial & final trade calculations (both strikes expired OTM and worthless): Trade Management Calculator
- OTM $225.00 put: $90.00 time-value premium (1 contract)
–0.40%, 29.32% annualized
–Protection to BE ($224.10): 10.64%
- OTM $230.00 put: $137.00 time-value premium (1 contract)
–0.60%, 43.74% annualized
–Protection to BE ($228.63): 8.83%
- Total time-value premium collected for 2, 5-day contracts: $227.00
5-day initial & final returns
- 0.50% (max return) annualized = 52% annualized
Discussion
- Significant returns can be generated with 5-day defensive cash-secured put trade
- Option trades can be crafted to align with all market environments and personal risk tolerance
- In the case of CLS, significant initial 5-day returns were captured and realized
- These are low-risk, not no-risk trades
- I refer to the process of using multiple strikes with the same underlying security and expiration date as laddering strikes
Selling Cash-Secured Puts
The purpose of this book is to give the reader the tools to master a conservative stock and option strategy with the goals of generating monthly cash flow and focusing in on capital preservation. Selling cash-secured puts is a low-risk strategy that leverages high-quality stocks and exchange-traded funds to accomplish these objectives.
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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:
1. Long Island Stock Investors Meetup Group: Part I
Thursday February 12, 2026
7:30 PM ET – 9:00 PM ET
Credit Spreads for Bull & Bear Markets
Introducing Our Latest Products, Creating New Investment Opportunities
2. Las Vegas Money Show- 2 presentations
February 23 – 25, 2026
The Collar Strategy: Covered Call Writing with Protective Puts
Protecting covered call trades from catastrophic share loss
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 ceiling on the trade and the protective put guarantees a floor on the trade
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
- Educational products & discount coupon
- Q&A
Selling Cash-Secured Puts to Buy a Stock at a Discount or to Enter a Covered Call Trade
2 outcomes & 4 applications
Selling cash-secured puts is a low-risk option-selling strategy which generates weekly or monthly cash-flow. This presentation will detail how to craft the strategy to generate cash flow, buy a stock at a discounted price or to initiate a covered call trade. Topics included in the webinar include:
- Option basics
- The 3-required skills
- 4-practical applications
- Traditional put-selling
- PCP (Put-Call-Put or wheel) Strategy
- Buy a stock at a discount instead of setting a limit order
Real-life examples along with rules, guidelines and calculations are included in this presentation.
Time, date & registration link.
3. Palm Beach Traders Club
March 10, 2026
6:30 PM – 8 Pm ET
Private Investment Club / guests are welcome (free)
Wine-tasting event follows for those interested.
4. Long Island Stock Investors Meetup Group: Part II
Thursday March12, 2026
7:30 PM ET – 9:00 PM ET
Ultra-Low-Risk Approaches to Covered Call Writing & Selling Cash-Secured Puts
Introducing Our Latest Products, Creating New Investment Opportunities
5. Hollywood Florida Money Show
April 10, 2026
11:40 AM – 12:25 PM
The Put-Call-Put (PCP) or Wheel Strategy
Using Both Covered Call Writing and Put-Selling to Generate Monthly Cash Flow
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 a 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 of low-risk option-selling strategies will be discussed as well as an analysis of 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 consistent, returns which will enable us to potentially beat the market on a consistent basis while focusing on capital preservation.
More details to follow.
6. Young Investor’s Club at The University of Central Florida
April 16, 2026
Private student investment club.
7. Sarasota Investment Group
Portfolio Overwriting: A Form of Covered Call Writing
Wednesday April 22, 2026
Details to follow.
8. BCI Educational Webinar #10: The Put-Call-Put (PCP) or “Wheel Strategy”
Thursday May 14, 2026, at 8 PM ET
Using both covered call writing & cash-secured puts in a multi-tiered option selling strategy. A 68-day real-life example taken from one of Alan’s portfolios will be analyzed.
BONUS: Barry will share a real-life credit spread trade using our BCI Conservative Credit Spread Management System.
Discount coupons a live Q&A session will follow the presentation.
9. Orlando Money Show
October 5 – 7, 2026
Details to follow.
Premium Members,
This week’s Weekly Stock Screen and Watch List has been uploaded to The Blue Collar Investor Premium Member site and is available for download in the “Reports” section. Look for the report dated 01/30/26.
Be sure to check out the latest BCI Training Videos and “Ask Alan” segments. You can view them on The Blue Collar YouTube Channel. For your convenience, the link to the BCI YouTube Channel is:
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Barry and The Blue Collar Investor Team
Good evening Alan,
Always look forward to your presentations and e-mails.
Interesting strategy on the defensive 5 day cash secured puts. I oftentimes do similar trades. Sometimes I enter the friday before, giving myself a full week; at other times I enter on a thursday or even on a friday morning, just before the expiration at the end of the day, friday.
My question is on the math…does the “return on option annualized” calculation overstate the return since it’s assuming we are earning approx 0.4% every 5 days (under the $225 strike), when in reality we are earning the approx 0.4% every 7 days since the trade is not in place over an assumed 2-day weekend?
In this case, aren’t we earning a simple annualized return of around 20-21% rather than the 29+% the model is calculating?
Thank you.
Jed
Jed,
Excellent observation.
There are 3 points I’d like to make that you should find helpful (I hope).
1. Excel spreadsheets, like our Trade Management Calculator (TMC), calculate annualized returns by taking the return, dividing it by the # of days in the trade and then multiplying by 365. This means that if we are only executing weekly trades entered on Monday and exited on Friday, there is no trading taking place on weekends. To get an accurate annualization, we would multiply the % return by 52 (52, 5-day trades).
2. There is a workaround using Excel spreadsheets … enter the expiration date as Sunday, not Friday. Then, the spreadsheet will divide by 7 and multiply by 365. This issue applies to trades entered and exited in the same week.
3. There is no need or advantage to entering a weekly trade on Friday. Market-makers deduct weekend time-value on Friday, so there is little or no time-value advantage of entering on Friday, rather than Monday, plus we are incurring weekend risk.
Alan
Alan,
I am looking at the options for CVX from the Blue chip Report.
I was looking at a deep ITM call for 2/20/26. A warning came up that said “The selected contract is a non-standard option that has been adjusted.”
Can you tell me what this means? Is this something to do with the ex- dividend on 2/17/26. Never seen this before, is this something to avoid?
Thanks
Ivan
Ivan,
This is not the result of an anticipated ex-dividend date.
Option contract adjustments are the result of unusual corporate events such as stock splits, 1-time special cash dividends and mergers& acquisitions.
In the case of CVX, it was likely the result of last year’s merger with Hess Corp (HESS) where options were adjusted to include 102 or 105 shares of CVX, depending on the specific, effective date. Other adjustments include cash in lieu settlements for fractional shares.
You’ll notice in the option chain that some tickers start with CVX and others with CVX1. The later are the adjusted contracts.
Adjusted contracts create no winners or losers; the OCC sees to that. However, they are a bit more difficult to understand and calculate.
Nothing wrong with using these contracts, but to simplify, you may want to select from the tickers that start with CVX (without the “1”). Up to you.
Alan
Today’s Quasar markets interview: The Collar Strategy
https://x.com/QuasarMarkets/status/2018709173756936268
Premium members:
This week’s 5-page report of top-performing ETFs, along with our sample trade of the week, has been uploaded to your premium site. The Select Sector SPDR section is now crafted to align with our streamlined (CEO) approach to covered call writing. The report also lists Top-performing ETFs with Weekly options, mid-week market tone as well as the implied volatility of all eligible candidates.
We have also included a sample trade taken from one of our BCI watchlists.
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Alan and the BCI team