Put-Selling System: How Every Trade Is Picked

Next trades

These are the next trades that pass every rule in the system, sized for a $100,000 account. Quotes: Cboe delayed option quotes at the 3 Nov 2026 US close (about 5:00 AM, 4 Nov SGT). Stock prices: 3 Nov 2026 US close.

Step 1

NVIDIA (NVDA) · open position

Buy to close the 27 Nov $180 put

Enter at (limit): $2.42 or less
Cash freed: $18,000
Profit locked: About +$275
If the stock falls: You have already exited
Take profit at: n/a

Why: Banks 54% of the premium before the 17 Nov earnings report and frees room under the cap.

Trade 1

First Solar (FSLR) · renewables

Sell 1 put, strike $160, expiry 18 Dec

Enter at (limit): $4.15 (no less than $3.70)
Cash locked: $16,000
Most you can earn: $415
If the stock falls below $160: You buy 100 shares at $160 (real cost about $155.85)
Take profit: buy back at: $2.05

Why: $160 is well below fair value ($213) and the 60-day low ($165.86); pays about 19% a year; earnings already reported.

Trade 2

Boston Scientific (BSX) · medtech

Sell 1 put, strike $37.50, expiry 18 Dec

Enter at (limit): $0.45 (no less than $0.40)
Cash locked: $3,750
Most you can earn: $45
If the stock falls below $37.50: You buy 100 shares at $37.50 (real cost about $37.05)
Take profit: buy back at: $0.22

Why: Strike is far below fair value ($64) and the 60-day low ($39.57); a small position in a beaten-down medtech.

Collateral after these trades

GOOGL put: $25,000
FSLR put: $16,000
BSX put: $3,750
Total: $44,750
Cap (45% of $100k): $45,000

Assumes the NVDA $180 put is closed (Step 1) and the NVDA $190 put expires on 4 Nov (US).

Sector spread

Tech / AI56%

Renewables36%

Medtech8%

If the NVDA $180 put stays open, only $2,000 of room remains: skip Trade 1. Next in line: Vertiv (VRT) 18 Dec $185 put, bid $3.00 / ask $3.50, $18,500 locked, about 13.5% a year.

Open positions

Open puts as of 4 Nov 2026. Marks are Cboe delayed bid/ask at the 3 Nov US close (about 5:00 AM, 4 Nov SGT).

GOOGL

Alphabet · 27 Nov $250 put

Sold for $286 · fee $2.63

Net premium: $283.37
Cash secured: $25,000
Break-even: $247.17
Bid / ask (mid): 1.06 / 1.62 (1.34)
Unrealised P/L: +$149 (53%)
50% target: ≤ $1.43
Stock vs strike: $280.03 · 10.7% above
Delta: −0.10

Plan: Good-till-cancelled buy to close at $1.43.

NVDA

NVIDIA · 27 Nov $180 put

Sold for $520 · fee $2.63

Net premium: $517.37
Cash secured: $18,000
Break-even: $174.83
Bid / ask (mid): 2.31 / 2.42 (2.37)
Unrealised P/L: +$281 (54%)
50% target: ≤ $2.60
Stock vs strike: $206.69 · 12.9% above
Delta: −0.15

Plan: Close before earnings on 17 Nov, 5 PM ET (about 6 AM, 18 Nov SGT).

NVDA

NVIDIA · 4 Nov $190 put

Sold for $15 · fee $2.32

Net premium: $12.68
Cash secured: $19,000
Break-even: $189.85
Bid / ask: 0.04 / 0.05
Unrealised P/L: +$8.70
Stock vs strike: $206.69 · 8.1% above
Delta: −0.02

Plan: Let it expire.

Concentration. All open puts are AI megacaps. Total collateral is $62,000, falling to $43,000 once the 4 Nov put expires, against a $45,000 cap.

Cheat sheet

#	Rule	In plain English
1	Quality first	Strong free cash flow, sticky customers, a moat. Sectors: AI/tech, renewables, medtech.
2	Know the fair value	Fair value = 60% cash-flow (DCF) value + 40% peer-multiple value.
3	Strike at or below fair value and the 60-day low	Only agree to buy at a price the business is worth and the chart has already defended.
4	Score three engines	Quality 45% + Macro/news 25% + Technicals 30%. 70+ is a core trade, 55–70 small, under 55 skip.
5	Check who is selling	Big insider sales, vesting, lock-ups, offerings or index exits in the next 30–40 days: wait or shrink.
6	Premium must pay	Bid at least 8% a year; delta −0.10 to −0.30; open interest at least 100; spread no more than 25% of the mid.
7	Expiry 30–45 days	Time decay works best here. Avoid holding through earnings unless the strike is at or below the bear-case value.
8	Size small	All puts ≤ $45k of a $100k account; ≤ $25k per stock; ≤ 60% of the put bucket in one sector.
9	Enter with a limit at the mid	Never use a market order. Accept no less than the bid.
10	Take profit at 50%	Place a buy-to-close order at half the premium as soon as you are filled. No automatic rolling.
11	If assigned	You own 100 shares at a price you already judged fair. Hold, or sell covered calls.

Decision flow

Screen
AI/tech, renewables or medtech, with positive normalised free cash flow and a moat?
Yes → Fair valueNo → Drop
Fair value
Run the DCF (bear/base/bull) and peer multiple. Fair value = 0.6 × DCF base + 0.4 × multiple.
Yes → EnginesNo → —
Engines
Composite score 55 or higher?
Yes → Ownership check (70+ core, 55–70 small)No → Watchlist
Ownership and catalysts
No heavy insider or supply event in 30–40 days, and earnings handled?
Yes → StrikeNo → Wait or halve the size
Strike
A listed strike ≤ min(fair value, 60-day low)?
Yes → PremiumNo → Wait for a pullback
Premium
Bid ≥ 8%/yr, delta −0.10 to −0.30, OI ≥ 100, spread ≤ 25% of mid?
Yes → SizingNo → Next expiry or skip
Sizing
Fits the $45k bucket, $25k per stock, 60% per sector?
Yes → EntryNo → Close something or skip
Entry
Limit sell at the mid (never below the bid), 30–45 day expiry.
Yes → ManageNo → —
Manage
Premium has fallen to 50% of entry?
Yes → Buy to close and recycle the cashNo → Hold; re-check before earnings or news
Exit
Out of the money at expiry?
Yes → Keep the full premiumNo → Take assignment at a fair price

Fair value

Fair value blends a cash-flow model with a market cross-check, so neither a heavy-spending year nor a hype multiple distorts the answer.

Value per share = [ Σ FCF_t/(1+r)^t + TV/(1+r)¹⁰ − net debt ] ÷ sharesTV = FCF₁₀ × (1+g_T) / (r − g_T)Fair value = 0.6 × DCF base + 0.4 × (forward EPS × peer P/E)

Free cash flow: Operating cash flow − capex, latest annual. Normalised to about 80% of forward earnings when one-off capex distorts it (labelled as an estimate).
Years 1–5: FCF grows at g, in bear / base / bull cases (e.g. MSFT 6/11/15%, NVDA 10/20/30%, FSLR −5/5/12%).
Years 6–10: Growth fades in a straight line to the terminal rate.
Terminal growth: 3%, about long-run nominal GDP.
Discount rate: 9% for wide-moat compounders; 10–11% for cyclical or high-beta names. Anchored to Damodaran sector cost of capital and a 10-year Treasury near 4.9%.
Peer multiple: Forward EPS × peer P/E (e.g. MSFT 28×, ISRG 40×, FSLR 12×, BSX 25×), checked against Damodaran and GuruFocus.
Strike rule: Strike ≤ base-case fair value and ≤ the 60-day low.

Engines

Engine	Weight	What it scores (0–100)	How
A. Quality and moat	45%	FCF strength 20, moat 20, client stickiness 20, balance sheet 15, management 15, valuation sanity 10	Sum of sub-scores, adjusted by industry
B. Macro, geopolitics, news	25%	Rates, tariffs, export controls, policy, guidance, earnings in the window	Start at 70; earnings in window −5 to −10; guidance cut −10; policy tailwind +5
C. Technicals and volatility	30%	Trend 30 + RSI 25 + IV/HV 25 + Cushion 20	Trend: price > 200-day +15, 50-day > 200-day +10, price > 50-day +5. RSI: 30–45 = 25, <30 = 18, 45–60 = 15, >60 = 8. IV/HV = min(25, 25 × (IV/HV30)/1.3). Cushion = min(20, 20 × (60-day low − strike)/expected move), where expected move = price × HV30 × √(days/365).
Composite	—	0.45A + 0.25B + 0.30C	70+ core · 55–70 small · under 55 skip

Filters & sizing

Check	What to look at	Rule
Ownership	Institutional %, insider %, short % of float	Short interest above 10% means bigger swings: size smaller
Insider supply	Form 4 sales in the last 90 days; whether under a 10b5-1 plan	Large unplanned open-market sales: B −5 and wait
Vesting and lock-ups	RSU vests, trading windows reopening, lock-up expiries	Lock-up expiring in the window: skip
Buybacks and offerings	Active buyback vs. new share issuance	Offering in the window: skip
Index events	S&P quarterly rebalance (third Friday of Mar/Jun/Sep/Dec)	Deletion risk: skip
Catalysts (30–40 days)	Earnings, FOMC, CPI, jobs report, monthly expiry, policy dates	Reviewed for every trade
Premium	Annualised = bid ÷ strike × 365 ÷ days; delta; open interest; spread	≥ 8%; −0.10 to −0.30; ≥ 100; ≤ 25% of mid
Expiry	Days to expiry	30–45 days
Earnings in window	Expiry vs. earnings date	Prefer an expiry before earnings; otherwise strike ≤ bear value and close before the report once 50% is captured
Take profit	Buy-to-close order	At 50% of the entry premium
Collateral cap	$100k account, open puts included	≤ $45k total · ≤ $25k per stock · ≤ 60% per sector
Diversification	Sector mix	Avoid two correlated names into one event

Worked example

Step	Number	Result
Price (3 Nov close)	$185.90	—
DCF bear / base / bull	$104 / $171 / $243 (g −5/5/12%, r 11%, terminal 3%)	—
Peer multiple	$23.08 forward EPS × 12 = $277	—
Fair value	0.6 × 171 + 0.4 × 277 = $213	—
60-day low	$165.86	—
Strike ceiling	min(213, 165.86) → $160 strike	Pass
Composite	About 60 (A 64, B 50, solid technicals)	Small trade
Ownership	Insiders 5.4%, short 14.1% of float, small Form 4 sales, results out 30 Oct	Pass, size small
Premium	Bid $3.70 / ask $4.65 → 19.2% a year on the bid; delta −0.19; OI 1,122; spread 23% of mid	Pass
Size	$16,000 locked; total puts $44,750 ≤ $45,000; renewables 36%	Pass
Entry	Sell 1 put, limit $4.15 (no less than $3.70)	—
Outcomes	Max gain $415; break-even $155.85; if assigned, own 100 FSLR at $160, about 25% below fair value	—
Manage	Good-till-cancelled buy to close at $2.05 (50%)	—

Glossary

Cash-secured put: Selling a put while holding cash equal to strike × 100, so you can buy the shares if assigned.
Premium · bid · ask · mid: Premium is the cash you receive. Bid is what buyers pay now, ask is what sellers want, mid is halfway.
Strike: The price at which you agree to buy the shares.
Assignment: The put is exercised and you buy 100 shares at the strike.
Break-even: Strike minus premium received.
Delta: Roughly the chance the option finishes in the money (−0.20 ≈ 20%).
IV / HV: Implied volatility (priced into options) vs. historical volatility (actual moves). IV above HV means richer premiums.
Open interest: Number of open contracts; higher means easier to trade.
DCF: Discounted cash flow: today’s value of future free cash flow.
Discount rate / WACC: The required return used to discount cash flows.
Terminal value: Value of all cash flows after year 10.
Free cash flow: Operating cash flow minus capital spending.
RSI: A 0–100 momentum gauge; under 30 is oversold.
Form 4 · 10b5-1: Form 4 is an SEC filing of an insider trade; a 10b5-1 plan is a pre-scheduled trading plan.
Lock-up: A period when insiders cannot sell, e.g. after an IPO or a deal.
Monthly expiry: Standard options expire on the third Friday of the month.
Buy to close · GTC: Buying back the put you sold to exit. A good-till-cancelled order stays open until filled.

Sources

Valuation framework adapted from a value-investing playbook (Find, Value, Decide, Earn, Compound).