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Selling a put option while holding enough cash to buy 100 shares if assigned. The first phase of the wheel strategy. Profit comes from theta decay if the stock stays above the strike.
⚡ KEY TAKEAWAY: Only sell CSPs on stocks you're happy to own at the strike price. That mindset eliminates panic if assigned.
Bear Call Spread
Use when you expect the stock to stay flat or decline. Collect premium upfront with defined risk — your max loss is the spread width minus the credit received.
Calendar Spread
Best deployed when near-term IV is pumped relative to the back month — sell the expensive leg and keep the cheap one. Earnings season is prime calendar spread territory.
Premium Selling
Works best when IV is high, VRP is positive, and the stock is range-bound. Time is on your side.
Covered Call
Sell calls above your cost basis to generate income while waiting to exit at a profit.