How Selling Options Helped Me Bounce Back After a Layoff

I “retired” in November 2024 after being laid off by a startup that shall remain unnamed. The severance package carried me through the end of the year, but I needed a new income stream. Thankfully, my wife works full-time, but I wanted to contribute and at least partially offset my lost income.

So, what did I do to backstop my financial loss? I turned to selling option premiums—lots of them. My journey began in April when I started buying premiums, and I made a tidy profit. Then hubris struck. I tried to replicate my success, only to lose my gains—and then some. Lesson learned.

I dug deeper, did more research, and experimented with calendar spreads. Spoiler: I found them frustrating and unprofitable. The losses continued.

Everything changed when I switched to selling premium. In September, I pivoted to cash-secured puts, and that’s when I started turning a consistent profit. In the last two months of 2024 alone, I earned over $12,000. It could have been even more if I hadn’t had to roll one in-the-money (ITM) position. Still, averaging $6,000 a month was no small feat—it was a lifesaver.

That said, I wouldn’t recommend selling options to just anyone. It’s a complex, high-risk strategy. If you don’t understand what you’re doing or fail to manage your trades, you can blow up spectacularly.

But if you do know what you’re doing and approach it with disciplined risk management, selling options can be a lifeline. Do I ever get assigned? Yes, but rarely. Out of 61 trades last year, I was assigned six times—that’s roughly 9% of the time. When it happens, I either keep the shares or sell covered calls on them. This approach is often referred to as the “Wheel Strategy.”

Will I stop trading this way? Absolutely not. I’ve found an income strategy that’s flipping the script for me, allowing me to take my time finding a new gig. One thing’s for sure: I’ll never rely on a single stream of income again. Never.