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👉 Stock Market Summary: What You Need to Know 🧠
👉 Turn Cash into Passive Cash Flow: The Options Trick That Pays You to Wait for Bargains 💰
👉 Pros & Cons: What You Need to Know Before You Start ✅
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.”
Stock Market Summary
The Nasdaq closed down 0.21% on Friday, marking a weekly loss of ~3%, its worst 5 day stretch since early April 2025.
The dip was fuelled by continued weakness in AI stocks amid growing fears of an economic slowdown.
The ongoing government shutdown (the longest ever) has increased investor concerns about the economic strength of the U.S.
Nonfarm payrolls report were delayed for the 2nd month and a University of Michigan survey showed consumer sentiment to be near record lows.
Leah Bennett of Concurrent Asset Management noted the data blackout and eroding valuations but viewed the sell-off as not overly concerning, citing a rotation to value stocks. She believes AI spending continues and the rally will resume once again. Time will tell.
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The Options Trick That Pays You to Wait for Bargains
We’re in a market that seems to never stop going up, until it dips 5% in a single day and all hell breaks loose.
Investors panic, often selling their shares much too early, missing out on “what could have been” if they had just had the discipline to stay put.
There are opportunities everywhere. No matter what type of market we’re in.
Whether it’s on its way to the moon or falling like your favourite rollercoaster, I’m going to share with you an options strategy you can use to generate income no matter what.
After you read this newsletter, you’ll have all the tools you need to make money in any market.
Once you have the foundation, building the empire is just a matter of time.
Cash Secured Puts - The Options Trick That Pays You to Wait for Bargains
If you’re an investor eyeing options strategies but want to minimize that heart pounding risk, cash secured puts are for you.
This strategy isn’t gambling, but rather more like renting out your cash reserves while waiting to buy great stocks at a discount.
I promise you once you understand how it works, this strategy becomes a money printer.
P.S. Our community of retail investors inside The Profit Academy often share how they’ve used these strategies as a “side hustle”, especially on non-dividend paying stocks. If you want to see it work in real time, join here.
The Basics:
A cash secured put involves selling (or writing) a put option on a stock you want to own. And I emphasize “want to own” for a reason. You have to be willing to own this stock long term in the event you get assigned. More on that below.
This strategy is “backed” by holding enough cash to buy 100 shares if “assigned”.
In simpler terms, you’re agreeing to purchase the stock at a set strike price if it drops below that level by expiration.
In return for agreeing to do this, you collect a premium up front. That’s your “rent” income (or cash flow), that is paid directly into your account. It’s yours to keep and you can choose to use it however you’d like.
How does it work?
The following example uses made up numbers for simplification purposes. The strategy remains the same no matter what the stock price is, although keep in mind that the higher the stock price, the more money you will need upfront.
Say Tesla (TSLA) is trading at $350 and you're bullish long-term but wouldn't mind snagging it at a cheaper price.
You decide to sell a $320 put expiring in a month for a $5 premium per share. Keep in mind 1 put option = 100 shares.
That's $500 income (100 shares x $5) deposited into your account right away. Nobody can take this money from you. It’s yours to keep.
If TSLA stays above $320, the put expires worthless.
What happens?
You keep the full premium ($500) as profit and no shares are bought.
Your return?
About 1.56% on the $32,000 cash set aside ($320 strike x 100 shares), annualized to around 18-19% if repeated monthly.
If it dips below $320 and you're “assigned”, you buy the 100 shares at $320 ($32,000), but your effective cost is $315 ($320 minus the $5 premium you collected).
This strategy shines for creating yield where none exists.
Growth stocks that are hot in this AI-driven market but dont pay a dividend, can turn into income machines using this strategy.
Sell puts on them and you're earning cash flow while the market decides what to do next.
For dividend payers like Coca-Cola (KO), it's just extra gravy.
Stack the premium on top of the yield for amplified returns.
In today's market environment, with valuations stretched and uncertainty lingering from policy shifts, volatility boosts premiums. Therefore you can make even more money using this strategy.
Tips to make this strategy easier:
I understand you may have a lower risk tolerance than I do, so here are some tips if you do:
Stick to blue-chip stocks or ETFs you know: I like to pick strikes 5-10% below current prices for extra safety, helping me reduce the odds of getting assigned while also earning decent premiums.
Time it right. I like to pick monthly expirations usually 30 days out but I ALWAYS try to stay away from these strategies during earnings season because stocks can fluctuate a lot in price and its not worth the risk.
Roll them out. If the stock hovers near the strike price, buy back the put and sell a new one further out.
Think risk management first. Only use cash you're okay with deploying, as your max loss is the strike price minus the premium if the stock tanks (though you end up owning it cheaper).
Using this strategy can generate returns that outpace any T-bill or fixed income asset you can think of.
The Cons
Of course there is no strategy that comes without its own pitfalls.
Here are a few to be aware of:
Assignment means tying up your capital and if the stock keeps falling, you now own the shares which means further losses. This is why its important to do this on stocks that you’re okay with owning long term.
Avoid meme stocks and focus on fundamentals. Meme stocks are trash to begin with, and its not something you’d be willing to own long term. Don’t even go down that road.
Start small. One contract at a time. As you continue to earn premiums and reinvest the cash, you can up that to 2 contracts, then 3 contracts and then 4. You can see how this strategy becomes more powerful as you have more money. In the example above using Tesla, if you had sold 4 contracts, your premium would have been $2,000 instead of $500.
This is NOT a get-rich-quick scheme.
It IS a build-wealth-smart strategy.
Combining puts with your core holdings creates a layer of income streams.
We’re doing this on a monthly basis inside The Profit Academy. If you want to join and start implementing this strategy on household name stocks, there’s a high chance you make your money back from the cost of the subscription in Month 1.
After the next 10 members join, the price will be doubling to $40/month.
Stay profitable,
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