How to Generate Consistent Income Using Options

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Most traders focus on buying stocks, hoping prices will go up. But if you want to generate consistent income, selling options is one of the best strategies out there.

It allows you to collect premium, lower your cost basis and reduce risk — all while keeping capital flexible.

Why Selling Options Works

The key to selling options is understanding how to use probability in your favor. Unlike buying options, which requires a stock to move in a specific direction quickly, selling them lets you profit as long as the stock stays within a reasonable range.

My go-to approach is selling cash-secured puts and covered calls.

When I sell a put, I collect premium upfront, and if the stock drops to my strike price, I’m willing to own it at a discount. If it doesn’t, I keep the premium and move on to the next trade.

Covered calls work the same way — I sell a call against stocks I already own at least 100 shares of, collecting premium in exchange for agreeing to sell shares at a higher price.

Another great strategy is using ratio spreads.

These involve selling more options than you buy, creating a setup where you can profit in multiple scenarios. For example, I recently traded Nvidia (NVDA) using a ratio spread at the 115-by-110 strike. As long as the stock stayed above 110 by expiration, I made money.

If it dropped below that, I had a hedge in place to limit losses.

How I Structure My Trades

Instead of tying up capital in stocks, I prefer to keep about 50% of my portfolio in option trades. The rest is a mix of stock ownership and commodities like gold and Bitcoin.

Most of my trades are structured for income — not speculation — so I focus on probabilities and time decay.

For example, when I sell a put on Amazon (AMZN), I look for a strike price that gives me a solid credit while keeping my break-even price well below recent support levels.

If assigned shares, I can sell covered calls to further reduce my cost. The goal is to keep stacking premium and avoiding big directional risks.

Selling options isn’t about chasing high returns. It’s about building steady, repeatable income while keeping your portfolio flexible. Stocks will always move, but with the right option strategies, you can get paid no matter what stocks are doing.

I’ll see you in the markets.

Chris Pulver
Chris Pulver Trading

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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 

P.S. 1 Strange Trade Would Have Doubled A Stake 31 Times in 2025 Alone…

And according to two former hedge fund traders, this special option could present more opportunities in 2026.

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We develop strategies to the best of our ability, but we cannot guarantee a future return. There is always a risk of loss when trading. Past performance is not indicative of future results. The results shown are from a 237-trade backtest from 1/1/20 – 1/1/26. The result was a 70% win rate, 40% average return (winners and losers), with a 7-day hold time.