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/

Covered call writers seek to generate premium, a consistent weekly or monthly cash flow. Call strikes can be out-of-the-money (OTM), at-the-money (ATM) or in-the-money (ITM). ITM strikes have 2 components (time- or extrinsic-value + intrinsic-value, the amount the strike is lower than current market value). ITM strike premiums can be deceiving, because only the time-value component represents actual initial time-value profit. Option contract expirations can be shorter-dated or longer-dated. I always favor shorter-dated expirations (weekly & monthly).

In this article, a real-life example with Net Ease Inc. (Nasdaq: NTES) will be analyzed to determine if selling deep ITM (DITM) extremely long-dated covered call options (LEAPS) represents a practical approach to this great strategy.

Option chain data for NTES on 4/14/2026

• NTES trading at $114.35
• The $40.00 1/15/2027 DITM LEAPS shows a bid-ask spread of $75.00 – $78.60
• The open interest (OI) for this strike is 2 contracts (extremely low, rendering “negotiating” a better price unlikely)
• Low option liquidity also means that buying back the option, if needed, may be an expensive proposition
• A premium of $75.00/share seems enticing, but let’s turn to the BCI Trade Management Calculator (TMC) for initial trade results

NTES LEAPS covered call calculations with the TMC

• Red circle: This is a 277-day trade, if taken through contract expiration
• Yellow cell: The breakeven price is $39.35 because of the 2 premium components (time-value + intrinsic-value). The time-value component is only $0.65 per-share, not $75 per-share
• Brown cell: The annualized return of the time-value component is a meager 2.14%
• Pink cell: The actual initial time-value profit per contract is $65.00, not $7500

Other potential strategy concerns

• Longer-dated expirations typically result in lower annualized returns
• Longer-dated options diminish the opportunity to frequently re-evaluate our bullish assumptions on the underlying securities
• Multiple earning report exposure is risky

Discussion

Selling DITM LEAPS covered call options is, generally, not a viable strategy for those seeking to beat the market on a consistent basis. Poor option liquidity, lower annualized returns, difficulty in achieving favorable trade executions, earnings exposures and low time-value components are reasons we may choose to avoid this strategy approach.

BCI Premium Membership

And much more.

Click here for more information.

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. 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.

2. 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.

3. Orlando Money Show

October 5 – 7, 2026

Hilton Orlando Lake Buena Vista

3 presentations:

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

For more details and registration link, click here.

4. American Association of Individual Investors: National 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

Dates and times to be confirmed.

5. 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.

6. Long Island Stock Traders Investment Group

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

Registration link and details to follow.

7. Las Vegas Money Show

February 22 – 24, 2027

Paris Hotel

I have a question regarding one of my trades. I sold 1 $380 call contract of AMD 5-8-26 expiration against my shares for $936.42.

AMD is now ~$410 per share (up $60 today!) and the 5/8/26 $380’s are ~$3000.

I’m looking to potentially roll my shares, let the option expire and give up the shares, or a better strategy.

Please help!

Thank you,
Jon

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

Premium Membership:
⁠https://thebluecollarinvestor.com/minimembership/premium-membership/

Best Discounted Packages:

1. BCI Package, our Best and most Comprehensive Investment package:
⁠https://thebluecollarinvestor.com/minimembership/bci-investor-program/

2. TCM Package – BCI Trade Management System:
⁠https://thebluecollarinvestor.com/minimembership/trade-management-calculator-product/

3. CEO Package – Includes TMC Package:
⁠https://thebluecollarinvestor.com/minimembership/ceo-package/

4. Credit Spread Management System
https://thebluecollarinvestor.com/minimembership/credit-spread-calculator-product/

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 we sell cash-secured puts (CSPs), strike selection is one of the most critical decisions which impacts on the success or lack thereof of our trades. In our BCI methodology, we favor out-of-the-money (OTM) CSPs, where we are contractually obligated to buy shares at a lower price than current market value. The closer that strike is to current price, the greater the premium. That’s the good news. The tradeoff is that near-the-money (slightly OTM) put strikes offer less protection to the downside when compared to deeper OTM strikes. In this article, a real-life example with NVIDIA Corp. (Nasdaq: NVDA) will be analyzed to determine how low we can go when seeking as much protection as possible.

NVDA option-chain on 4/14/2026 for the 5/15/2026 expirations (NVDA: $189.15)

• The $180.00 strike has a bid price of $3.85 (green cells)
• The $175.00 strike has a bid price of $2.67 (blue cells)
• The $170.00 strike has a bid price of $1.82 (pink cells)
• The $165.00 strike has a bid price of $1.25 (yellow cells)
• The $160.00 strike has a bid price of $0.86 (brown cells)

Before deciding on which strike to select, a minimum annualized return goal must be identified. If we don’t know how much % return we are seeking, how would we be able to identify the appropriate strikes? For purposes of this article, let’s presume a minimum 10% annualized return.

NVDA: Initial put calculations for 5 potential strike selections: The BCI Trade Management Calculator (TMC)

• Red oval: These are 32-day trades
• Yellow cells: Breakeven prices
• Pink cells: Initial annualized returns
• Brown cells: % discount if shares are purchased at the breakeven prices
• If our minimum required initial time-value return goal is at least 10% annualized, the $170.00, $175.00 and $180.00 strikes are all in play

Discussion

In bear, volatile and/or uncertain market conditions, we may seek greater protection to the downside with our option-selling trades. This translates into deeper OTM cash-secured puts. Before determining how far OTM we go (or how low we go), initial time-value return goal range must be pre-stated. The BCI Trade Management Calculator (TMC) will then guide us to the most appropriate strikes.

Trade Management Calculator & User Guide with $50 Discount Coupon

• Enter trade
• Generate initial returns per trade
• Generate initial returns per portfolio
• Over 20 exit strategy adjustment opportunities
• Post-adjusted returns per trade
• Post-adjusted returns per portfolio
• Trade journal for notes and comments

For videos and to learn more, click 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. 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.

2. 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.

3. Orlando Money Show

October 5 – 7, 2026

Hilton Orlando Lake Buena Vista

3 presentations:

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

For more details and registration link, click here.

4. American Association of Individual Investors: National 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

Dates and times to be confirmed.

5. 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.

Begin additional segments text here (like testimonials, events, etc.)

This podcast details how to mitigate covered call writing losses by implementing the rolling-down exit strategy. A real-life example with XLV will be used. Broker screenshots, calculations using the BCI Trade Management Calculator (TMC) for both initial and final calculations will be discussed.

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

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

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

Over the past 2 decades, I have had the honor of training thousands of retail and professional traders on the strategies of covered call writing and selling cash-secured puts. I have noted that there are common errors made by these investors and will share the top 5 in this article. By the way, I made these same mistakes back in the day and I want you to avoid them … learn the easy way, not the hard way! Here they are, in no specific order:

Starting too soon

When I do my seminars and webinars, I watch the audience and see the excitement. it’s palpable. We can’t help but love the fact that we are generating income the moment we execute our trades, instant gratification, if you will. There are 3 skillsets that must be mastered to achieve the highest levels of returns: stock selection, option selection and position management (exit strategies). This will take the average investor 3 – 4 months including 1 – 2 months of paper (practice) trading.

Attracted to high implied volatility stocks

When we sell options, we sell time and volatility (IV). Generally, the greater the time-to-expiration, the higher the premium. Also, the high IV securities will generate higher, sometimes much higher, premiums. Options newbies are attracted to these high IV stocks & ETFs because they are receiving more money, simple as that. What is neglected is the fact that the higher the IV, the greater the risk to the downside. Since most covered call writers are conservative investors with low personal risk-tolerance and capital preservation as a critical requirement, high IV securities are not appropriate in most situations.

Not avoiding key dates

Earnings report (ER) dates should always be avoided, and ex-dividend dates should be circumvented if share retention is critical. ER dates represent potential high volatility events that can cause dramatic share price movement in either direction. Never have an option in place if there is an upcoming earning report. If share retention is a requirement in your strategy approach, ex-dividend dates also must be avoided as they are the most common reason for early exercise of our covered call options.

Unprepared to manage trades

I have seen too many option sellers enter trades appropriately, but they are lost if trade management becomes necessary. What do we do0 if the trade turns against us? What if it performs so much better than we anticipated/ Can we generate more than a maximum return (yes, we can). Being prepared when exit strategy opportunities are present is just as important as stock selection and option placement.

Focused on $ amount rather than % measurement

This error is much too common. A trade can generate $100.00. Another with the same strike but a different expiration date can generate $500.00 and a 3rd $2000.00. Which one would you select? Let’s look at a real-life example with Intel Corp. (Nasdaq: INTC).

INTC option chains on 4/13/2026 with INTC priced at $62.36

These 3 option chains show premiums of $480.00 (40 days to expiration), $116.00.00 (5 DTE) and $1465.00 (341 DTE) per-contract. Raise your hand if you would have selected $1465.00. come on, raise those hands.

INTC initial calculations for the 3 same strike, multi-dated contracts

The shorter-dated options have the lowest $ premiums (pink cells), while producing the highest annualized returns (brown cells). I call these high $ premiums the “shiny objects”. We, as Blue Collar Investors must put on our sunglasses and ignore those shiny objects and evaluate our trades based on % returns.

Discussion

Certainly, there are other mistakes made by option traders (including me), but we must make sure they are few and far between. If we can eliminate the 5 discussed in this article, just watch our portfolio net worth grow so much higher.

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.

Click here to learn more.

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. 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 for free here.

2. Toronto Money Show

September 24 – 25, 2026

MaRS Center, Toronto Canada

Generating a 3rd Income Stream in Existing Stock Portfolios

Register here.

3. Orlando Money Show

October 5 – 7, 2026

Hilton Orlando Lake Buena Vista

3 presentations:

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

For more details and registration link, click here.

4. American Association of Individual Investors: National 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

Dates and times to be confirmed.

5. 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.

Begin additional segments text here (like testimonials, events, etc.)