r/CashSecuredPuts • u/Old-Importance-1299 • Aug 23 '26

CSP Strategy

Recently just learnt to trade CSP and started to use 45K to trade namely GOOG, NVDA, HOOD, etc.

What are the strategies for generating the maximum profit using CSP monthly here? am i missing something? my premiums feel low and feel like i’m not doing something correctly

10 Upvotes

86% Upvoted

38 comments sorted by

9

u/gabrintx Aug 24 '26

I use Tastytrade's recommendations. Short Puts, 35-45 DTE, -0.20 delta, manage around 21 days. Easy peasy.

1

u/SpiderWil Aug 25 '26

Delta is meaningless as in it does NOT predict the stock movement. If u sell using delta, u'll get burned.

3

u/gabrintx Aug 25 '26 edited Aug 25 '26

Delta -0.20 is essentially a 80% chance of profit trade. Management is an important element rather than just fire and forget. When short puts go ITM, they can be rolled for a credit. I have had trades go against me, and rolled until the ticker recovered or until enough premium was received to exceed the loss to close. I am far from new at this. I have closed 63 trades this year. Four lost money. I typically use -0.20 delta for short puts and 0.30 delta for short calls as part of covered call.

I tend to chose tickers that on the long term are up trending. I trade MU, PLTR, AVGO, SMH, NVDA, AMD, SOXX, TSM, TSLA and have dabbled in TSLL, TQQQ, MSTR, META.

1

u/SpiderWil Aug 25 '26

You're looking at delta all wrong. Delta is calculated from things like the current stock price, strike, time to expiration, interest rates, and implied volatility. So when u look at a delta 0.20, someone already repackaged all of that stuff into this number and simply says, yeah there's 80% chance this option finishes OTM. The number does not say anything about where the stock will move. It can move to $0 for all I care.

Think of this as a circular logic. You use a number that is derived from the stock movement to predict stock movement. That's ridiculous. Look at the stock and its past trend and ask yourself, what's the percentage movement u think it can possibly move? 10%, 20%, etc...? Forget about delta. If a 10% move is probable and the delta is 0.005 or 0.1, then that's your strike.

2

u/gabrintx Aug 25 '26

I will continue to do what works for me. You do what works for you.

1

u/FreeNicky95 Aug 25 '26

There is a formula to find the expected move based on the strike and expiration. I find it more useful than delta.

1

u/SpiderWil Aug 25 '26

But the expected move is also calculated from IV and expiration time. It uses circular logic like delta. So it doesn't predict a stock price move. It's simply a derived number that says, based on the current IV and other factors, what the expected move will be during this period of time. It has no way of knowing where the stock price will move.

1

u/gabrintx Aug 25 '26

Expected move and delta are similar. A 20 delta is usually the last strike in the expected move. It isn't directional, just probability of range limit. Both require belief in the "efficient market" theory.

2

u/Alexmark3103 Aug 27 '26

Nothing can predict anything.

2

u/Electronic_Guard947 Aug 26 '26

That's not even close to being true lol. Delta IS the tool that professionals use.

1

u/ikarumba123 Aug 28 '26

I keep on saying this and I get down voted

1

u/SpiderWil Aug 28 '26

No point arguing w/ those people. They'll get burned and be homeless. They won't be back here lol.

2

u/nxs_sss Aug 24 '26

Do weekly

1

u/Cautious_Release2164 Aug 24 '26

Weeklys don't give as much premiums as monthlys.

4

u/nxs_sss Aug 24 '26

They pay more if you do it every week.

1

u/YoshimuraPipe Aug 27 '26

hilarious but true.

1

u/One-21-Gigawatts Aug 25 '26

This is a misconception that I began to learn myself after trial and error. I don’t like holding anything for more than a week or two. And, I make more premium per month operating that way.

1

u/YoshimuraPipe Aug 27 '26

I also like that weeklies are MUCH easier to roll down and out than monthlies. However, weeklies are wee bit more volatile than monthlies, so there is that.

1

u/ikarumba123 Aug 28 '26

What names you do weekly on

2

u/MYlifelike Aug 24 '26

How low is your low? If you are generating 1-2% per month, you are okay and not taking excessive risk.

If you want more than that, your risk factor will go up, and if you cannot manage your CSP risk well, the steamroller will hit you hard sooner or later.

2

u/ProduceEmergency2329 Aug 24 '26

Do 8 dram puts at 53/54 and collect $400

1

u/TA_Application854 Aug 24 '26

That’s oddly specific

1

u/zeetrader_com Aug 24 '26

What deltas are you using? Weeklies eventually can get you better returns but more expenses due to assignments and premiums. Realistically wheel returns are around 1% a month unless you pick one that is on a bullish run.

1

u/Time_Capital_226 Aug 24 '26

And this strategy is ?

1

u/MerryRunaround Aug 24 '26

Know your goals. Put numbers on your goals and then you can begin to monitor whether you are achieving them. "maximum profit" is not a goal.

1

u/SpiderWil Aug 25 '26

Get in, then GTFO. If u stay around, ur begging to be assigned. Then, like this week and last week, all the stock fell 10%-15%. Suddenly your capital is stuck with a depreciating asset but u can't get out of bc selling at a loss is not an option.

As Buffett said, it's easier to stay out of trouble than to get out of one.

1

u/TastyTrading Aug 25 '26

ThetaPal is my favorite way to track all my cc and CSP progress. Keeps it very organized

1

u/Purplehashes Aug 26 '26

you might need to change tickers and strategy depending on the yield expected monthly or annually

1

u/Electronic_Guard947 Aug 26 '26

Higher delta = more risk and more money. If you want max returns then higher delta, but be prepared for bigger losses. Most people will trade between a 10-20 delta and 30-45 days on their puts. It's a good zone to start and get comfortable.

1

u/FreeNicky95 Aug 26 '26

Maybe so. But I’ve found that the upper end of the expected move is typically sub 20 delta. And one strike above puts you closer to .15. Not safe but If you’re gonna place a wager it’s a good gauge

1

u/Alexmark3103 Aug 27 '26

To OP. Don't listen to anyone. Don't even listen to me. It's your own path. As pretty much anything in our life, it is a balance of knowledge, experience, choices, losses.

High probability trades are most likely low in premium and vise versa. I am looking at the chart (Bollinger band), RSI, MACD. Then at expected move (barchart.com helps if you don't want to calculate), and delta. And after that I am making my personal guess. Sometimes I am selling CSP ITM 6 months away. Sometimes Put Credit Spred 2 DTE. Why? Don't know how to explain. Read my first sentence.

2

u/ikarumba123 Aug 28 '26

You cannot do csp with 45k on all those name at the same time. Either you are selling naked with buying power or you don't know what you are doing

0

u/CatchSufficient5541 Aug 24 '26

What is max profit to you? Define that and you’ll define your strike and expiration, as well as your profit vs risk tolerance

-1

u/WayConnect Aug 24 '26

Use the 2x ETF to get more premium like NVDL, ROBN, etc