G.L.A INVE$T RE$EARCH | The Infinite Innovation Family Of Newsletters | Friday, October 23, 2026 |
DISCLAIMER: This is not investment advice. G.L.A INVE$T RE$EARCH is not an investment advisory or brokerage. We are a private research company that helps retail investors make informed decisions. G.L.A INVE$T RE$EARCH is independent educational research; the author is a former broker and is not currently licensed or a registered investment adviser.
Independent, experienced insights, and deep dive research. Helping Investors make informed decisions.
OPTIONS RISK STATEMENT: Options involve risk and are not suitable for all investors; read the OCC Characteristics and Risks of Standardized Options (theocc.com).
Why This Issue, Why Now
Many of you have done the hard part. You bought great companies early, you held through gut-wrenching drawdowns, and now you own a big, concentrated position in a name like TSLA, PLTR, NVDA, MSTR, CBRS or HOOD. The question we hear most often: "Can my shares pay me while I keep holding them?"
The answer is yes, but there is a trade off. Selling options (covered calls and cash-secured puts) turns volatility into cash premium. Great companies with big futures tend to have big option premiums, because the market prices in big moves. That premium is real money. But it is never free. It is payment for giving something up: some upside (calls) or a promise to buy (puts).
This issue covers:
The plain-English mechanics: covered calls, cash-secured puts and the wheel.
Real TSLA option quotes from the Oct 22, 2026 close.
How concentrated holders can use these tools, and the risks, including taxes, explained honestly.
The G.L.A rules for selling options, and OUR VIEW.
Chart: expiration payoffs using Oct 22, 2026 closing bid quotes for TSLA Nov 20, 2026 options. Source: Yahoo Finance via yfinance. Ignores commissions, early assignment and taxes.
The Basics in Plain English
An option is a contract. One standard equity option covers 100 shares. The buyer pays a premium for a right. The seller (also called the writer) collects that premium and takes on an obligation. FINRA puts it simply: calls give the buyer the right to buy and give the seller "the obligation to sell shares if the contract is assigned," while puts give the seller "the obligation to buy shares if the contract is assigned" (FINRA, Options).
You own at least 100 shares.
You sell one call at a strike price above today's price, for an expiration date you choose.
You collect the premium today, and it is yours to keep no matter what.
If the stock stays below the strike at expiration: the call expires worthless. You keep your shares and the premium. Then you can do it again.
If the stock is above the strike: your shares can be "called away" (sold) at the strike. You keep the premium, but you give up every dollar of gain above the strike.
The Options Industry Council (OIC, the education arm of OCC) describes the covered call as income with a small downside cushion, but notes that while the call is open "the investor forfeits much of the stock's profit potential" (OIC, Covered Call).
2. The cash-secured put: get paid to wait for your price
You set aside enough cash to buy 100 shares at the strike price.
You sell one put at a strike below today's price: a price you would be happy to pay.
You collect the premium today.
If the stock stays above the strike: the put expires worthless. You keep the premium and your cash.
If the stock is below the strike: you buy 100 shares at the strike. Your effective cost is the strike minus the premium you collected.
OIC describes the goal as being "assigned and acquire the stock below today's market price," and warns that the stock "might not only dip but plummet well below the strike price," so "the investor must be comfortable with the strike price as an acceptable long-term acquisition price, no matter how low the market goes" (OIC, Cash-Secured Put).
The wheel combines the two. OIC summarizes it as "selling puts then, if assigned the shares, possibly selling calls against the long stock position" . You sell cash-secured puts until you are assigned shares, sell covered calls on those shares until they are called away, then start over.
Key terms you will see
Strike: the price at which shares change hands if the option is exercised.
Out of the money (OTM): a call strike above the current price, or a put strike below it.
Delta: roughly how much the option price moves for a $1 move in the stock (FINRA definition). Many traders also use delta as a rough, informal gauge of the odds an option finishes in the money. A 0.15 delta call is generally considered a lot less likely to be assigned than a 0.50 delta call. That is a rule of thumb, not a promise.
Rolling: buying back your open option and selling a new one, usually with a later expiration and, for calls, a higher strike. OIC notes "rolling up" a covered call "can afford more upside potential" (OIC).
Assignment: the seller being required to deliver (calls) or buy (puts) the shares. FINRA: "For the sellers of equity options, assignment can happen at any time" (FINRA).
Collar: own the shares, buy a protective put below the price, and pay for it (in whole or in part) by selling a call above the price. Your downside and your upside are both capped for that period.
Real Numbers: TSLA Option Quotes, Oct 22, 2026 Close
These are examples for education, not recommendations.
Trade (expiration) | Strike | Distance from $374.58 | Bid per share | Per contract | Implied vol. | Est. delta* |
|---|---|---|---|---|---|---|
Covered call (Nov 20, 2026, 29 days) | $430 | 14.8% above | $2.60 | $260 | 41.4% | about 0.14 |
Far OTM covered call (Nov 20, 2026) | $450 | 20.1% above | $1.21 | $121 | 42.1% | about 0.07 |
Weekly covered call (Oct 30, 2026, 8 days) | $420 | 12.1% above | $0.52 | $52 | 46.9% | about 0.05 |
Weekly far OTM call (Oct 30, 2026) | $450 | 20.1% above | $0.11 | $11 | 53.9% | about 0.01 |
Cash-secured put (Nov 20, 2026) | $335 | 10.6% below | $4.00 | $400 | 43.2% | about -0.16 |
*Delta is the G.L.A estimate using Black-Scholes with the Yahoo Finance implied volatility and an assumed 4% interest rate. It is not a quoted figure. Implied volatility is as reported by Yahoo Finance.
Example A: the covered call on 100 shares ($430 strike, Nov 20)
You collect $260 today. On $37,458 of TSLA, that is about 0.69% in 29 days.
TSLA under $430 on Nov 20: the call expires. You keep the $260 and all 100 shares.
TSLA above $430 on Nov 20: your shares are sold at $430. Add the $2.60 premium and your effective sale price is $432.60, about 15.5% above the Oct 22 close. Every dollar above $432.60 belongs to the call buyer, not you.
TSLA falls: the $2.60 softens the loss a little. It does not protect you.
Example B: the cash-secured put ($335 strike, Nov 20)
You set aside $33,500 and collect $400 today, about 1.19% on the cash in 29 days.
TSLA above $335 on Nov 20: you keep the $400 and your cash. The process can be repeated.
TSLA below $335 on Nov 20: you buy 100 shares at $335. Your net cost is $331.00, about 11.6% below the Oct 22 close. If TSLA is at $300 that day, you own shares worth $300 that cost you $331. That is the same loss any shareholder would have from $331, which is why our rule is to sell puts only at prices we would truly love to own.
Example C (HYPOTHETICAL): partial coverage on a 1,000 share position
These outcomes are HYPOTHETICAL. Only the $2.60 premium and $374.58 close come from the Oct 22 data above.
A holder of 1,000 TSLA shares sells 3 of the $430 calls (covering 300 shares, 30%) and collects $780.
HYPOTHETICAL rally to $500 by Nov 20: the 700 uncovered shares capture the full move (about $87,794 of gain). The 300 covered shares are sold at an effective $432.60, giving up about $20,220 of upside versus simply holding. Premium of $780 versus $20,220 of forgone gain: that is what a capped rally looks like.
HYPOTHETICAL flat or down month: the holder keeps the $780, keeps all 1,000 shares, and can decide again next month.
The lesson: covering only part of a position keeps most of your shares free to run.
G.L.A Rules for Selling Options
Our core shares are never for sale. We decide our core share count first. We never write calls on it.
We only sell calls at prices we would be genuinely happy to sell. If assignment would hurt, we do not write the call.
We only sell puts at prices we would love to buy, with the full cash set aside. We do not use margin-funded puts.
Partial coverage only. We cover a small slice (we think 10% to 30% at most) of shares above our core.
We go far out of the money on great growth companies. We accept smaller premiums in exchange for more room to run.
We write our plan before we trade: strike, expiration, size, and what we will do if the stock runs (let it go, roll or buy back).
We respect catalysts. We are extra careful around earnings and big product or index events.
Know your tax picture first, including cost basis, holding period and the qualified covered call rules. Talk to a tax pro.
We never sell naked calls.
We check liquidity: open interest and a tight bid/ask spread.
We put the premium to work: we use it to DCA into our best long-term names.
Read the OCC Characteristics and Risks of Standardized Options before your first trade, and make sure your broker has approved you for the strategy.
OUR VIEW (long term)
Core long-term shares are the engine. Options income is a tool, not the strategy.
We are wildly optimistic about the companies in this issue. TSLA, PLTR, NVDA, MSTR,CBRS,AMZN, GOOG and HOOD are building the future of AI, autonomy, robotics, software and finance, and we believe the biggest gains come to owners who hold great businesses through the noise. That is why we will never let a few dollars of premium put our core shares at risk of being called away right before the next great run.
Used carefully, options can make a long-term plan stronger:
Selling far out of the money calls on a small slice of a big position can turn volatility into steady cash.
Selling cash-secured puts at prices we would love to pay gets us paid while we wait for a dip.
Collars can help someone who truly needs a floor stay invested instead of panic selling.
Premium swept into more shares adds fuel to the engine.
DCA (Dollar Cost Averaging) + Exponential Growth + Compounding Interest = Generational Wealth
That is why we keep saying it: volatility tolerance is the most important attribute of a great investor. Selling options does not remove volatility. It changes how you experience it. If a 30% to 50% drop would force us to sell, or a 50% rally past our strike would make us sick, we size down or skip options entirely. Let great businesses compound.
Goat Quote of the Day
"Far more important, however, is that one hundred years of retained earnings will hugely increase the value of most of the companies in the index. In the 20th Century, the Dow-Jones Industrial Average increased by about 175-fold, mainly because of this retained-earnings factor."
Warren Buffett, Berkshire Hathaway 2008 Chairman's Letter, explaining why he was comfortable selling long-dated put options on the S&P 500 (berkshirehathaway.com)
The world's most famous long-term investor sold puts because he was confident that great businesses keep growing. Long-term optimism first, option premium second.
Invest in the best, ignore the rest, with a little help from G.L.A INVEST!
Coach Kyle
G.L.A INVE$T RE$EARCH | The Infinite Innovation Family Of Newsletters
Independent, experienced insights, and deep dive research to help retail investors build generational wealth through longterm investing!
DISCLAIMER: This is not investment advice. G.L.A INVE$T RE$EARCH is not an investment advisory or brokerage. We are a private research company that helps retail investors make informed decisions. G.L.A INVE$T RE$EARCH is independent educational research; the author is a former broker and is not currently licensed or a registered investment adviser.
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