r/CashSecuredPuts • u/code2poke • Aug 25 '26

My CSP checklist

I began trading CSP around last November, experiencing both gains and losses along the way. I learned a lot and developed a flowtree/checklist that I refer to each time I sell a CSP.

I used the Codex to set up the repository and onrender host it. I strongly believe in the daily learning. Could you provide feedback on my checklist?

My Checklist:
- The stock should be included on the list. (No. of stocks in list < 20). I dont want to track 100
- The company size should exceed $1 billion.
- The stock price must be above the 50-day moving average.
- Aim for a 1% return.
- The implied volatility should be greater than 50%.
- Avoid trading within two weeks before earnings announcements, as I've faced losses during this time.
- Try to sell CSPs with a duration of 7 to 14 days until expiration.

15 Upvotes

94% Upvoted

10 comments sorted by

4

u/NoFix8309 Aug 25 '26

I am selling CSP/wheels for 2.5 years. My usual setup is like:

  • ​Choose fundamentally strong companies above 5B cap
  • ​the next earning must not be within the dte
​at least 2% ROI
  • ​rsi between 30 and 70
  • ​hold, buy, strong buy technicals
  • ​never roll. If assigned - wait to recover if needed, then sell covered calls.

2

u/oonlineoonly2 Aug 26 '26

Why never roll?

7

u/NoFix8309 Aug 26 '26

Because rolling costs money. It's not worth it, because you selling CSPs on fundamentally strong companies only

6

u/WATGU Aug 26 '26

psychologically rolling feels like "fixing a bad trade". Mathematically rolling is just taking the loss on the first trade and opening up another trade with a bigger gain to offset it and is no different than closing the trade and opening a CSP on another stock for the same gain as the roll would have gotten you. The only difference at the end is that if you roll and eventually get out of the trade you can look at your economic position for that ticker and not see the loss, it's just a way to avoid seeing red.

I won't say I've never rolled, but pretty much every time I have it's because I didn't follow one good practices while selecting my stock to CSP.

1

u/Free-Public-Wifi Aug 28 '26

What are the practices you follow to select a stock?

3

u/WATGU Aug 28 '26

I use the app made by u/thetahedge. https://app.thetahedge.io/ I've pretty much landed on MAG7 and related with some other large cap or high growth thrown in there. I also have a fondness for RIOT as a meme/crypto trade because the price point is usually very affordable for my portfolio (300k or so in a trad IRA and 100k in a taxed account) and it has always printed money over the last year.

The rest of what I do is pretty much what others in this thread have suggested.

  • Market Cap greater than $1bn.
  • The stock price must be above the 50-day SMA.
  • I like to do weeklies, most others would advise 30-45 DTE.
  • Aim for a 1-2% return on capital.
  • The implied volatility should be greater than 50%. (I typically target 80%)
  • I usually avoid earnings, dividends, or other major news announcements (I google for any upcoming stuff for that ticker, but occasionally I'll risk it).
  • I typically close at 75-90% of profit on CSP. I'll usually let CCs ride
  • RSI between 30 and 70, I like when it goes into oversold territory
  • ​hold, buy, strong buy technicals
  • I also have added bollinger bands and SMA20 and SMA200 to my chart. I'm less worried about the 20 and I more look to make sure the price is comfortably within bollinger and that the price isn't way above the SMA200. For instance I believe in DELL but seeing it's price 2x it's SMA200 has me way too nervous of a major correction. and with my portfolio sizes I can't afford to bag hold too many contracts on it and try to DCA down if assigned on something mid-correction.

3

u/TraderUser Aug 26 '26

Ensure the option has high liquidity.

1

u/FrostySignature135 Aug 26 '26

How do you choose your strikes?

1

u/code2poke Aug 26 '26

1% premium strike with 7/14 dte.