To The Moon

Weekly Put Selling Strategy: A Winning Formula with SoFi

My journey into selling weekly puts for SoFi stock has been nothing short of remarkable. The strategy is simple but highly effective: I consistently sell out-of-the-money (OTM) cash-secured puts to earn weekly premiums. By carefully managing risk and capitalizing on SoFi’s solid fundamentals, I’ve turned this into a reliable income stream while maintaining a strong margin of safety.

The Mechanics of Weekly Put Selling

Selling OTM cash-secured puts allows me to generate weekly income by committing to buy SoFi shares at a lower price—if assigned. This strategy is particularly advantageous because SoFi has been delivering positive earnings growth, which instills confidence in its stock performance.

Each week, I analyze SoFi’s price movement and select a strike price below the current trading price—usually with a delta around 0.30. This ensures a balance between earning a substantial premium and lowering the risk of assignment. For example, if SoFi trades at $7, I might sell a put with a $6.50 strike price. If SoFi remains above $6.50 by expiration, I keep the premium without needing to buy the stock.

Maximizing Premiums, Minimizing Risk

The key to this strategy is risk management. By focusing on cash-secured puts, I avoid over-leveraging and ensure I have enough capital to purchase SoFi shares if assigned. Additionally, selecting OTM strikes creates a cushion against unexpected market volatility, allowing me to profit even if the stock dips slightly.

Another way I mitigate risk is by avoiding overcommitment. I ensure my margin usage stays below 50%, leaving ample room to handle market downturns. Selling puts weekly, rather than monthly, gives me greater flexibility to adjust to SoFi’s price movements and market conditions.

Why SoFi?

SoFi stands out as an ideal candidate for this strategy. The company’s positive earnings trajectory signals strong growth potential, which reduces the likelihood of steep declines in stock price. Additionally, SoFi’s popularity among retail investors creates ample trading volume and liquidity, ensuring I can easily execute my options trades.

Steady Gains and the Power of Compounding

Through this strategy, I’ve consistently earned premiums, which I reinvest to compound returns. For instance, earning $0.15 to $0.20 per share each week may seem small initially, but it adds up quickly over time. By rolling over unassigned puts or adjusting strikes higher, I’ve maintained steady profits regardless of SoFi’s price fluctuations.

The Results

This approach has proven to be a reliable way to generate income while building exposure to a growth stock like SoFi. By focusing on selling weekly cash-secured puts, I’ve found a low-risk, high-reward strategy that aligns perfectly with my investing philosophy. SoFi’s strong fundamentals and my disciplined approach have made this a winning formula that delivers consistent results week after week.$SOFI 20241220 14.5 PUT$ 

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