This strategy is for selling a cash-settled short put option on the US 500 Index via the IG options chain. Maximum loss can be significant if not managed correctly. Strictly adhere to risk mgt guidelines.
I. Setup & Rationale
Trade Date: Tuesday, March 3rd 2026
Underlying Instrument: US 500 Index Option (S&P 500 Index)
Current Index Price:6808
Market Outlook: Strong Bullish/Neutral - Expected to remain above the strike price.
Goal of Trade: Premium Income Generation
Probability of Profit:97%(This is the main attraction in the trade)
II. The Trade Details
Action: Sell to Open Short Put Option
Strike Price:6150
Expiration Date:March 31st
Premium Collected: 31.18
Trade Size: 12 (Based on a €10K account)
Total Premium Collected: $374 (31.18*$12)
III. Risk & Profit Metrics
Maximum Profit:$374
Breakeven Price: [equals strike minus premium ] example $6,150 - $31.18 = $6,118.82 (We need the share price to remain above this price at EXPIRATION to make a profit)
Margin Required:€3,200 (30%). We recommend keeping it to below 50% of account size.
Maximum Loss: Unlimited - losses can increase the further the share price drops below the breakeven price.
IV. Trade Management & Exit Plan
Take Profit: Let Trade run to expiry unless we implement our risk management plan between now and expiry.
Risk Mgt:
If the price gets to within 2% of strike price, we will rollout to next monthly expiry and down to a strike price that gives you a $0.01 minimum credit.
If price suddenly drops and no rollout can be activated: we may close down the trade and take the loss. We will decide if and when that situation occurs.
📞 Strategy Call Assistance
If you require assistance with trade setup, risk management, or strategy review, please schedule a strategy call.
PREMIUM Plan Members: Strategy calls are included in your plan.
All Other Members: Strategy calls can be scheduled at a rate of €100 per half hour.
