| Target Yield |
Designed for roughly 14–20% per year on locked capital, based on fair value and proper strike selection. |
Headline percent looks “slower” than 3–4% per month, even though real-world results are more stable. |
| Upfront Float |
Large premium collected upfront (e.g., $39k vs $11k on the same name), giving more float to redeploy into other long-dated projects. |
Capital and risk are committed to a name for 12–24 months, so stock selection and sizing must be disciplined. |
| Early-Close Edge |
If price moves quickly in your favor, you can close early after capturing 70–80% of premium, boosting effective annualized return above the original 14–20%. |
Requires discipline not to overtrade just because you see big early gains on a long-dated position. |
| Work / Time |
One major decision per year (or every 2 years) instead of constant rolling — far less stress and screen time. |
Less “action”; not ideal if you crave frequent trades and daily excitement. |
| Valuation Discipline |
Forces a valuation-first approach: undervalued => long-dated secured cash puts, overvalued high-PE => capital extraction with deep ITM covered calls. |
Patience is required — you must wait for the right valuation levels instead of forcing trades every month. |
| Path Risk |
Price path matters less: one clean structure over 12–24 months instead of 12 fragile monthly steps with multiple failure points. |
Option pricing can be noisy mid-journey; you must focus on effective entry vs fair value rather than daily P/L. |
| Assignment & Basis |
Secured cash puts are sold where effective cost (strike − premium) is well below market and below fair value, so assignment is welcome. |
If the business or thesis genuinely breaks, you may need to close or adjust a long-dated position at a loss. |
| Tax |
Fewer trades and longer holding periods increase the chance of long-term capital gains treatment and reduce tax drag. |
Still requires tracking of holding periods around early closes and assignments. |
| Stock Selection |
Naturally pushes you into high-quality companies only — you commit to names you’re willing to hold for years if needed. |
Less room for speculative junk; you have to say “no” more often and be comfortable being selective. |
