Hi Alan,

I read an article about option traders taking advantage of high volatility stocks looking for high premiums for time decay. An example was stock “NTES” selling the 1/15/27 call with a strike of $40.00 and a premium of $75.00/share. The article said that the traders must know something big was going to happen. I looked at the option listed and it only had an open interest of 2. I wondered if entering that trade was safe, if in the nine months until exercise there would be additional open interest to buy to close. Your opinion?

Thank you,
Alan

Free Resources:
https://thebluecollarinvestor.com/minimembership/bci-free-resources/

Premium Membership:
⁠https://thebluecollarinvestor.com/membership

Best Discounted Packages:
https://www.thebluecollarinvestor.com/store/

More Videos:

• For those new to Alan’s system of Covered Call Writing, be sure to take the Free Beginners Corner Series
• Free Training Videos Archive
• Ask Alan Video Q & A Archive
• Subscribe to our YouTube Channel

To enter your questions to “Ask Alan”, fill out the form on the contact page. Be sure to begin your message with “ASK ALAN”

When a cash-secured put is sold, the goal is to avoid share price moving below the breakeven price (strike – put premium). One of the definitions of delta is approximate probability of the underlying security’s price moving below the OTM put strike and, therefore, subject to exercise. Delta measures this risk. What is a reasonable delta to target? In this article, a real-life example with Teradyne Inc. (Nasdaq: TER) will be analyzed to present a blueprint to address this dilemma.

TER put option chain on the Sunday before market opening on 5/26/2026 (using “last” prices transacted)

TER trading at $355.56

• Deltas are highlighted in the yellow cells
• Last transacted prices are highlighted in the brown cells
• Strikes under consideration are highlighted in pink
• With TER trading at $355.56, all strikes are deep OTM (much lower than current market value)
• Note the robust implied volatility (IV = 74% – 78%) of these strikes which allow for significant returns while still structuring our trades defensively

Initial low-delta strike put calculations using the BCI Trade Management Calculator (TMC)

• Brown cells: 24-day & annualized initial returns
• Yellow cells: Breakeven prices (all well below current market value of $355.56)
• Brown cells: Initial 24-day & annualized returns
• Pink cells: Cash generated into broker account per-contract
• Purple cells: % discount, if options are exercised and shares put to us at the breakeven prices

Which delta/ which strike do we select?

Before entering any trade, we must identify our goals. What are we looking to accomplish? For me, it’s an initial time-value return goal range between 2% – 4%/month. When looking to be defensive, it’s closer to 2%/month. This would lead me to the $280.00 and $290.00 put strikes. For those more aggressive, higher strikes may be appropriate. For traders who are more defensive, lower strikes will still return meaningful initial profits.

Discussion

Strike selection is based on the pre-stated initial time-value return goal range we are seeking, our personal risk tolerance and overall market assessment. One size does not fit all. In this article, low delta put strikes were analyzed showing initial returns and risk of exercise.

VIDEO: SELLING CASH-SECURED PUTS BASIC & ADVANCED PRINCIPLES

This course contains 6- parts in the video course:

Section I: Option basics (definitions and foundational information)
Section II: Traditional put-selling (stock & option selection + position management)
Section III: PCP (wheel) strategy (adding covered calls to selling cash-secured puts)
Section IV: Buy a stock at a discount instead of a limit order (buy a stock at our target price or get paid not to buy the stock)
Section V: Ultra-low-risk put/Delta strategy (High probability, low-risk trades)
Section VI: Ultra-low-risk put/implied volatility strategy (High probability, low-risk trades)

Learn more here.

-Want free access to BCI’s discount/coupon codes for Alan’s weekly Featured Product choice? Click here and subscribe free to The Market Tone Weekly.

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. American Association of Individual Investors: National paid event

Comprehensive 4-part live paid, online workshop event featuring covered call writing, cash-secured puts and advanced strategies.

Mastering Options for Income

A Comprehensive Workshop Series on Covered Calls, Cash-Secured Puts & Advanced Strategies

• 10/13 at 2 PM ET
• 10/20 at 2 PM ET
• 10/29 at 2 PM ET
• 11/10 at 2 PM ET

Details to follow.

2. Triple Edge Investing Summit: Technical Analysis • Options Strategies • ETF Mastery

Saturday January 23, 2027- All-day event

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 and registration link to follow.

3. Long Island Stock Traders Investment Group

Thursday February 18, 2026, at 7:30 PM ET

Registration link and details to follow.

4. Las Vegas Money Show

February 22 – 24, 2027

Paris Hotel

By combining covered call writing and selling cash-secured puts, we can create one multi-tiered option-selling strategy with the potential to beat the market on a consistent basis and offer significant protection to the downside. A real-life example with TMUS is analyzed, using the BCI Trade Management Calculator (MC). This strategy is also referred to as the “wheel strategy”.

Free Resources:
https://www.thebluecollarinvestor.com/free-training/

Premium Membership:
⁠https://www.thebluecollarinvestor.com/membership/

Best Discounted Packages:
⁠https://thebluecollarinvestor.com/store/

After selling an out-of-the-money (OTM) covered call and share price rises up to, or beyond the OTM strike, there is little or no opportunity to generate addition premium profit. When the price increase is substantial, there is also concern for profit-taking and subsequent price decline. In this article, a series of trades I executed with TTM Technologies Inc. (Nasdaq: TTMI) will be analyzed demonstrating the migration from a covered call to a cash-secured put trade. It moved from an aggressive call trade to profit-taking and to the establishment of a defensive put trade.

TTMI initial covered call trade

• 5/18/2026: Buy x 200 TTMI at $159.23
• 5/18/2026: STO 2 x 6/18/2026 $175.00 calls at $10.24
• 5/18/2026: Place 20% Guideline: BTC/GTC 2 x 6/18/2026 $175.00 calls at $2.05

Initial Covered Call Trade Calculations: BCI Trade Management Calculator (TMC)

Initial results

• Red oval: 32-day trade
• Yellow cell: Breakeven price
• Brown cells: Initial 32-day & annualized returns
• Purple cell: % upside potential
• Pink cell: $ amount of time-value premium collected
• Green cell: $ upside potential

Conversion of a CC Trade to a CSP Trade: What happened on 5/21/2026?

• In the 1st 4 days of the trade, TTMI went from $159.23 to $174.58
• With the $175.00 call in place, there was little opportunity to generate additional income (just $0.42 on the stock side)
• Also, I was concerned about profit-taking for this high-IV stock
• Cancelled the $20.05 BTC/GTC limit order (20% guideline)
• BTC 2 x 6/18/2026 $175.00 calls at $17.90
• Sell 200 x TTMI at $174.58
• STO 2 x 6/18/2026 $160.00 cash-secured puts at $9.95

Final Covered Call Trade Results: 5/18/2016 – 5/21/2026: 5/21/2026 adjustments

• Loss on the option side of 4.81% ($7.66/share)
• Gain on the stock side of 9.64% ($15.35/share)
• Net 4-day return: $1538.00
• Net 4-day return: 4.83%

Rational Behind the Conversion to a Put Trade

• There was minimal opportunity to generate additional income from this trade
• A large run-up in a short timeframe elicited a profit-taking concern
• If continuing appreciation takes place, rolling-up a put trade will create additional premium opportunities, while still providing downside protection
• Significant profit was realized, although not the initial max profit
• Comparing annualized returns:

                              –Initial return: 6.43% 32-day trade = 73.34% annualized

                              –Final covered call return: 4.83% 4-day trade = 440.73% annualized

• The conversion also resulted in substantial protection to the downside, not offered by the original covered call trade
• If stock price continues to rise, rolling-up the put strike will offer opportunities to increasing returns

29-Day Cash-Secured Put Trade

• This is now a 29-day trade (red circle)
• Breakeven price: $150.05 (yellow cell)
• 29-day & annualized returns in brown cells’
• Premium profit collected (1990.00- green cell)
• If exercised, shares are purchased at a discount of 14.05% (purple cell- $150.05)

Discussion

When an aggressive covered call trade has maximized its unrealized return, converting the trade to a cash-secured put trade can both enhance gains and offer greater protection to the downside.

Covered Call Writing Alternative Strategies

• Portfolio Overwriting- using stocks in buy-and-hold portfolios
  The Collar Strategy- using protective puts
  The Poor Man’s Covered Call- using LEAPS options

Click here to learn more.

-Want free access to BCI’s discount/coupon codes for Alan’s weekly Featured Product choice? Click here and subscribe free to The Market Tone Weekly.

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. Orlando Money Show

October 5 – 7, 2026

Hilton Orlando Lake Buena Vista

4 presentations:

• Portfolio Overwriting (2-hour Master Class)
• Setting Up High-Performance Option Portfolios
• Selling Cash-Secured Puts: The 2 Outcomes
• The Collar Strategy

For more details and registration link, click here.

2. American Association of Individual Investors: National paid event

Comprehensive 4-part live paid, online workshop event featuring covered call writing, cash-secured puts and advanced strategies.

Mastering Options for Income

A Comprehensive Workshop Series on Covered Calls, Cash-Secured Puts & Advanced Strategies

• 10/13 at 2 PM ET
• 10/20 at 2 PM ET
• 10/29 at 2 PM ET
• 11/10 at 2 PM ET

Details to follow.

3. Triple Edge Investing Summit: Technical Analysis • Options Strategies • ETF Mastery

Saturday January 23, 2027- All-day event

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 and registration link to follow.

4. Long Island Stock Traders Investment Group

Thursday February 18, 2026, at 7:30 PM ET

Registration link and details to follow.

5. Las Vegas Money Show

February 22 – 24, 2027

Paris Hotel

Option sellers are often enticed by ETFs (exchange-traded funds) that use the covered call writing strategy. One such ETF is QQQI, which shouldn’t be confused with one of my favorite ETFs, QQQ. Let’s define the 2 funds and then analyze the efficacy of using one versus the other.

What is Invesco QQQ Trust (Nasdaq: QQQ)?

An ETF based on the top 100 non-financial companies listed on the Nasdaq exchange. Here are the top 10 QQQ holdings as of 9-2026:

What is NEOS Nasdaq 100 High Income ETF QQQI)?

This is an ETF designed to generate high monthly income while giving investors exposure to Nasdaq-100 type stocks such as NVIDIA, Apple, and Microsoft. Its strategy is different from regular growth ETFs like QQQ because QQQI uses a covered call/options income strategy on the Nasdaq-100. That means it sells call options to collect premiums, which are then distributed to shareholders—typically monthly. This can create a relatively high yield, but it may also limit upside performance during strong bull markets.

Comparing the 2 ETFs

QQQ/QQQI/S&P 500 Comparison Price Chart: A picture is worth 1000 words (September 2026)

• In the past year, QQQ is up 23.80%%
• The S&P 500 has appreciated by 16.02%
• QQQI rose by 1.74%

Discussion

QQQ is, generally, a wonderful security to use for covered call writing. We can do so much better than covered call writing funds like QQQI. First, we don’t have to overcome the higher expense ratio. Additionally, we can implement our strike selection and position management skillsets that allow us to leave covered call writing funds in the dust.

Softcover Selling Cash-Secured Puts

This book will present basic option principles that apply to this system and will walk you through the process of stock and option selection. Additionally, calculating profits and position management will also be critical topics addressed. In other words, every aspect of this strategy will be discussed including the necessary steps to take before, during and after a trade is executed. Examples of real-life trade executions will be shown in conjunction with illustrative charts and graphs, and the rationale for each step behind the trade will be explained using easy-to-understand terminology.

Learn more here.

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. Orlando Money Show

October 5 – 7, 2026

Hilton Orlando Lake Buena Vista

4 presentations:

• Portfolio Overwriting (2-hour Master Class)
• Setting Up High-Performance Option Portfolios
• Selling Cash-Secured Puts: The 2 Outcomes
• The Collar Strategy

For more details and registration link, click here.

2. American Association of Individual Investors: National paid event

Comprehensive 4-part live paid, online workshop event featuring covered call writing, cash-secured puts and advanced strategies.

Mastering Options for Income

A Comprehensive Workshop Series on Covered Calls, Cash-Secured Puts & Advanced Strategies

• 10/13 at 2 PM ET
• 10/20 at 2 PM ET
• 10/29 at 2 PM ET
• 11/10 at 2 PM ET

Details to follow.

3. Triple Edge Investing Summit: Technical Analysis • Options Strategies • ETF Mastery

Saturday January 23, 2027- All-day event

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.

4. Long Island Stock Traders Investment Group

Thursday February 18, 2026, at 7:30 PM ET

Registration link and details to follow.

5. Las Vegas Money Show

February 22 – 24, 2027

Paris Hotel

In order to achieve the highest returns when selling cash-secured puts (covered calls, too), we must have an elite plan in place that checks all the available investment boxes. In this article, a $150k cash-secured put portfolio will be developed using the BCI Weekly Stock Screen & Watch List, The BCI ETF Report, The BCI Blue Chip (Dow 30) Report, the BCI Portfolio Setup Spreadsheet and the BCI Trade Management Calculator (TMC).

Overview of steps available to create an exceptional options portfolio

• Select only elite-performing underlying securities using the BCI reports or other resources
• Ensure that the portfolio adheres to adequate diversification requirements
• Allocate an approximate similar cash allocation per-position
• From option-chain data, run the calculations to confirm that the initial time-value return goal range aligns with the pre-stated objectives

Select top-notch securities from the BCI Premium Member Reports

• Stocks & ETFs were selected from all 3 reports
• 6 securities with $150k cash available

Use the Portfolio Setup Spreadsheet for diversification & cash allocation requirements

• Industry diversification in the blue cells on the far left
• Cash allocation in the last column on the right
• Number of contracts to be sold (red arrow)
• The spreadsheet allows for contract adjustments (LIT) to ensure an adequate amount of cash reserve
• Amount of cash set aside for potential exit strategy intervention in the red oval at the bottom

Initial per trade calculations using the BCI Trade Management Calculator (TMC)

Entries

Per-trade calculations

Initial total portfolio put calculations using the BCI Trade Management Calculator (TMC)

• The initial 23-day CSP total portfolio return is 2.85% which annualizes to 45.23%
• Once the portfolio is constructed, we move into position management mode, if needed

Discussion

To achieve the highest possible option returns, only elite-performing securities should be selected. This is followed by adequate diversification, cash-allocation and preliminary calculations. Portfolio construction is then followed by position management if and when need. The BCI Premium reports, Portfolio setup Spreadsheet & Trade Management Calculator (TMC) will facilitate all goals.

Stock Investing For Students: A Plan to Get Rich Slowly and Retire Young

Self-investing starting at a young age can ensure a successful financial future and an early and comfortable retirement. So why is nobody doing this? The answer includes such factors as the social pressures facing our youth, certain pre-conceived ideas regarding our ability to successfully self-invest and the education or lack thereof needed to motivate our youth to undertake such a long-term project. The purpose of this book is to change that way of thinking and create a goal and a user-friendly methodology that will facilitate a plan which will allow you to retire financially secure at a relatively young age.

Learn more here.

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. Toronto Money Show

MaRS Center, Toronto Canada

Friday, September 25, 2026, 11:15 AM – 12 PM

Friday, September 25, 2026, 4:20 PM – 5:40 PM

      2. Generating a 3rd Income Stream in Existing Stock Portfolios

Register here.

2. Orlando Money Show

October 5 – 7, 2026

Hilton Orlando Lake Buena Vista

4 presentations:

• Portfolio Overwriting (2-hour Master Class)
• Setting Up High-Performance Option Portfolios
• Selling Cash-Secured Puts: The 2 Outcomes
• The Collar Strategy

For more details and registration link, click here.

3. American Association of Individual Investors: National paid event

Comprehensive 4-part live paid, online workshop event featuring covered call writing, cash-secured puts and advanced strategies.

Mastering Options for Income

A Comprehensive Workshop Series on Covered Calls, Cash-Secured Puts & Advanced Strategies

• 10/13 at 2 PM ET
• 10/20 at 2 PM ET
• 10/29 at 2 PM ET
• 11/10 at 2 PM ET

Details to follow.

4. Triple Edge Investing Summit: Technical Analysis • Options Strategies • ETF Mastery

Saturday January 23, 2027- All-day event

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.

5. Long Island Stock Traders Investment Group

Thursday February 18, 2026, at 7:30 PM ET

Registration link and details to follow.

6. Las Vegas Money Show

February 22 – 24, 2027

Paris Hotel

This podcast discusses how to generate significant annualized returns, even during 4-day trades. Real-life examples with SMH, QQQ, NVDA and ETSY are analyzed. This video includes broker screenshots and discussions of the rationale behind the trades.

Free Resources:
https://www.thebluecollarinvestor.com/free-training/

Premium Membership:
⁠https://www.thebluecollarinvestor.com/membership/

Best Discounted Packages:
⁠https://thebluecollarinvestor.com/store/