CASH SECURED PUT STANDARD OPERATING PROCEDURE #
This is the ONE page you need. Print it, tape it to your monitor, and follow it for every single trade. No exceptions.
CAPITAL RULES #
| Rule | Value |
|---|---|
| Total Capital | $100,000 (recommended minimum) |
| Max Deployed | 75% ($75,000) |
| Cash Buffer | 25% ($25,000) - ALWAYS |
| Max Per Position | 5-7% ($5,000-$7,000) |
| Max Open Positions | 6-10 |
| Max Same Sector | 2 positions |
ENTRY RULES (ALL MUST BE TRUE) #
Market Context
- SPY above 50 & 200 MA
- VIX < 25
- No major event in 48h (Fed, CPI, Jobs)
Stock Quality
- Profitable company or broad ETF
- No earnings before expiration
- Would gladly own at strike price
Option Metrics
- DTE: 30-45 days
- Delta: 0.20-0.30
- IV Rank ≥ 30
- Premium ≥ 1% of strike
- Strike below support level
- Open Interest ≥ 500
- Bid-Ask spread ≤ 10%
EXECUTION RULES #
| Action | Rule |
|---|---|
| Order Type | SELL TO OPEN (Put) |
| Limit Price | Mid-price (never chase) |
| Weeklies | NEVER |
| Leverage/Margin | NEVER |
MANAGEMENT RULES #
Take Profit
- Close at 50-70% of max profit
- OR close at ≤21 DTE remaining
- Whichever comes FIRST
Roll Rules (ONLY IF ALL TRUE)
- Underlying still high quality
- Roll for NET CREDIT only
- New DTE ≤ 45 days
- New strike still acceptable for ownership
- NOT rolling just to avoid assignment
Assignment Rules
- Accept shares calmly
- Sell covered call ABOVE cost basis only
- Same parameters: 30-45 DTE, Delta 0.20-0.30
HARD NO RULES #
These rules exist because I learned them the hard way. Every rule here cost someone real money to discover.
| Never Do This | Why |
|---|---|
| Weekly options | Too much gamma, overtrading |
| Earnings plays | Binary events destroy you |
| Meme stocks | Assigned at worst time |
| Biotech/SPACs | No fundamentals |
| Margin/Leverage | Amplifies losses |
| Revenge trades | Emotional = poor decisions |
| Chase fills | Bad entry = bad trade |
STOCK UNIVERSE #
Tier 1 - ETFs (Safest) SPY, QQQ, IWM
Tier 2 - Mega Caps AAPL, MSFT, GOOGL, AMZN, NVDA* *smaller size due to volatility
Tier 3 - Defensive KO, PEP, PG, JNJ, XOM
DAILY CHECKLIST (< 5 Minutes) #
Morning (Before Open)
- Check market trend (SPY 50/200 MA)
- Check VIX level
- Check economic calendar
During Day (If Trading) 4. [ ] Review watchlist candidates 5. [ ] Verify all entry criteria 6. [ ] Place limit order at mid
End of Day 7. [ ] Review open positions 8. [ ] Check for profit targets hit 9. [ ] Note any approaching 21 DTE
EXPECTED RESULTS #
| Metric | Target |
|---|---|
| Monthly Return | 0.8-1.5% |
| Annualized Return | 10-18% |
| Win Rate | 70-85% |
| Drawdown | Market-dependent |
On $100k at 1%/month = $12,000/year passive income
THE GOLDEN RULE #
This is an income system, not a prediction game.
You are running a private insurance business on assets you already want to own.
Stay in the game forever.
QUICK REFERENCE LINKS #
- 📋 Full Entry Checklist - Complete criteria with explanations
- 📊 Watchlist & Workflow Guide - Detailed daily workflow
- 📚 Main CSP Guide - Complete educational guide
Print this. Follow it. Every. Single. Trade.
Last Updated: 2026-01-15