Disciplined Trading

A core set of principles for selling puts and managing risk. Prioritize capital preservation over quick gains.

Core Principles

Only Sell Puts on Stocks You Truly Believe In

  • • Choose stocks you don’t mind owning.
  • • Must have: Upward-trending chart, strong fundamentals (positive earnings, low PE), and rich/liquid options.

Keep LEAPS Exposure Under 10%

Your portfolio should never exceed 10% in LEAPS options.

Goal: Efficient capital multiplication + monthly income.

Don’t Chase Premium

Never sell options just for income.

👉 The setup must be solid — always refer back to Rule #1.

Avoid Selling Options on Leveraged ETFs

❌ No NVDL, TQQQ, MSTX, etc.

If assigned, theta decay hurts you. These products are meant for short-term trading only.

Manage Positions Early

To avoid assignment or when trading vertical spreads:

📅 Manage ideally by Monday of expiration week (or earlier).

Respect VIX Levels

  • VIX 18–20 = Gray Zone
  • Wait for break above 21 before deploying remaining capital.

Avoid Margin — Use Cash Secured

Margin is not recommended. Cash-secured keeps you safe during volatile spikes.

⚠️ Lesson learned: A $100k loss on margin during the 2020 COVID crash.

The Trader's Checklist

The Do's

  • Sell puts only on fundamentally strong, upward-trending stocks.
  • Keep LEAPS exposure small (≤10%).
  • Manage your positions proactively.
  • Stay patient and wait for favorable VIX conditions.
  • Prioritize safety by using cash-secured strategies.

The Don'ts

  • Don’t chase premium without a proper setup.
  • Don’t sell options on leveraged ETFs or leveraged stocks.
  • Don’t rely on margin — avoid unnecessary risk.
  • Don’t deploy capital in a low-VIX, uncertain environment.