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Course Content
Options Fundamentals
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Call and Put Options Explained
Options Pricing and Greeks
Exercise and Assignment Process
Basic Options Strategies
In 2026, the most successful retail traders have moved away from "gambling" on high-leverage options and instead use Basic Options Strategies to create consistent cash flow and protect their existing portfolios.Here are the four essential strategies that form the foundation of a professional options toolkit.1. Covered Call (The Income Generator)This is the most popular strategy in 2026 for long-term investors. You sell a call option against shares you already own.Setup: Own 100 shares of a stock + Sell 1 Out-of-the-Money (OTM) Call.The Goal: To collect the Premium (cash) from the buyer while waiting for the stock to rise.The Outcome:Stock stays flat/down: You keep the shares and the cash.Stock hits the Strike: you sell your shares at a profit and keep the cash.Best For: Generating "synthetic dividends" on stocks you plan to hold anyway.2. Cash-Secured Put (The "Buy at a Discount" Strategy)Instead of buying a stock at the current market price, you get paid to wait for a better price.Setup: Have enough cash to buy 100 shares + Sell 1 OTM Put.The Goal: To get paid a premium to commit to buying a stock at a lower price (Strike Price).The Outcome:Stock stays above Strike: You keep the cash and try again next week.Stock drops below Strike: You are "assigned" the shares at the lower price you wanted, and your effective cost is even lower because of the premium you kept.3. Long Call & Long Put (The Directional Bets)These are the simplest forms of options trading, used to profit from a specific price move without owning the underlying asset.Long Call: You buy a call because you believe the price will go up significantly. It offers unlimited profit potential with limited risk (the premium paid).Long Put: You buy a put because you believe the price will go down. This is often used as "Insurance" to protect a portfolio during a market crash.4. Strategy Comparison TableStrategyMarket SentimentPrimary GoalRisk ProfileCovered CallNeutral to Slightly BullishIncome GenerationMedium (Stock can still fall)Cash-Secured PutNeutral to Slightly BullishBuy Stock CheaperMedium (Stock can still fall)Long CallAggressively BullishLeverage / ProfitLow (Only lose premium)Long PutAggressively BearishProfit / ProtectionLow (Only lose premium)5. The "Wheel" Strategy (The 2026 Professional Workflow)Many 2026 traders combine these into a cycle known as The Wheel:Sell Cash-Secured Puts until you are assigned shares.Once you own the shares, sell Covered Calls until the shares are called away.Repeat. This allows you to collect premiums at every stage of the market cycle.2026 Tactical Note: In today's high-volatility environment, professional traders typically look for 30–45 Days to Expiration (DTE). This provides the best balance between capturing Theta (Time Decay) and giving the trade enough time to work.💡 Student ExercisePick a "Blue Chip" stock (like Apple or Tesla). Look at the options chain for 30 days from now.How much cash would you receive today for selling a Covered Call 5% above the current price?If you did this every month, what would your "annual yield" be from premiums alone?
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Covered Calls and Cash-Secured Puts
Long Calls and Puts
Options vs Stock Trading
Advanced Strategy Combinations
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Spreads and Straddles
Iron Condors and Butterflies
Calendar and Diagonal Spreads
Risk Management and Psychology
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Position Sizing for Options
Managing Winners and Losers
Avoiding Common Options Mistakes
Course Overview: Options Trading Masterclass

In the 2026 trading landscape, Covered Calls and Cash-Secured Puts are considered the “bread and butter” of income-generating strategies. When combined, they form a cycle known as The Wheel Strategy, which aims to collect premiums regardless of whether the market is moving up or sideways.

1. The Cash-Secured Put (CSP)

A Cash-Secured Put involves selling a put option while keeping enough cash in your account to buy the shares if the price drops to the strike price.1

 

 

  • The Goal: To get paid (collect premium) for agreeing to buy a stock you like at a lower price than it is today.

  • The Scenario:

    • Stock stays above Strike: The option expires worthless. You keep the premium and repeat.

    • Stock falls below Strike: You are “assigned.” you use your cash to buy the shares at the strike price.2 You still keep the premium, which effectively lowers your “cost basis.”3

       
       

       

2. The Covered Call (CC)

A Covered Call is the natural next step once you own 100 shares of a stock. You sell a call option against those shares.4

 

 

  • The Goal: To generate “synthetic dividends” (income) from a stock you already own.5

     

     

  • The Scenario:

    • Stock stays below Strike: You keep the shares and the premium. You sell another call for the next month.

    • Stock rises above Strike: Your shares are “called away.” You sell them at the strike price. You keep the capital gains from the stock move plus the premium collected.6

       

       

3. Comparison: Two Sides of the Same Coin

Feature Cash-Secured Put Covered Call
Prerequisite Cash in account 100 shares of stock
Market View Neutral to Bullish Neutral to Slightly Bullish
Primary Income Put Premium Call Premium
What happens if it “fails”? You end up owning the stock. You end up selling your stock.

4. Professional 2026 Tactical Advice

The “Sweet Spot” (Delta & DTE)

For both strategies, 2026 professionals typically target:

  • Timeframe: 30 to 45 Days to Expiration (DTE). This captures the peak of Theta decay (time value erosion).

  • Probability: A 0.30 Delta. This theoretically gives the trade a ~70% chance of expiring out-of-the-money, allowing you to keep the premium.

Risk Management

  • Avoid “Earnings Gambles”: Volatility (Vega) spikes during earnings.7 Unless you are comfortable with a massive price swing, avoid selling these options right before a company reports.

     

     

  • Selection is Key: Only use these strategies on high-quality “Blue Chip” stocks or index ETFs (like SPY or QQQ) that you are happy to own for the next 10 years.

5. Summary: The Wheel Strategy Flow

  1. Sell Cash-Secured Puts until you are assigned the shares.

  2. Sell Covered Calls on those shares until they are called away.

  3. Take your profit and go back to Step 1.

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