When it comes to building reliable income from the market, not all stocks are created equal. Some are too expensive, too illiquid or just not optionable enough to make sense for consistent income generation.
That’s why traders looking to lower cost basis and generate monthly income need to prioritize two core attributes — price and liquidity.
A cheap stock doesn’t mean a bad stock. It means one with a share price that allows traders to comfortably buy 100-share lots. That’s critical because one standard option contract controls 100 shares.
If the goal is to trade covered calls or put spreads to reduce cost basis or generate cash flow, the math has to make sense.
Stocks like Intel (INTC) or Snapchat (SNAP) are perfect examples — they’re liquid, under $30, and offer steady premium.
Equally important is liquidity. This isn’t just about volume — it’s about the quality of the option chain. If open interest is thin and bid/ask spreads are wide, you’re giving away edge before the trade even starts.
But when spreads are tight and open interest is high, you can get in and out quickly, roll positions with minimal slippage, and collect cleaner premium every time.
That’s what makes tickers like Tesla (TSLA), iShares 20+ Year Treasury Bond ETF (TLT), JD.com (JD) and even lower-priced names like SNAP and INTC so attractive for campaign-style trading.
How to Put It All Together
The goal isn’t to buy and pray — it’s to build a core position and generate repeatable income by rolling calls, trimming cost basis and letting the chart do the heavy lifting.
One recent example with Intel…
Shares were bought around $22.91. By selling a 30-day call with a $26 strike for 50 cents, that reduced the break-even to $22.41 on day one. Keep rolling every month for another 50 cents and you could drop your cost basis by $3 a share over six months — without touching the stock.
That kind of basic math adds up fast. The stock doesn’t even have to move much. As long as it stays rangebound or drifts higher, you’re getting paid.
That’s the entire idea behind running income campaigns on cheap, liquid stocks. You control the outcome, you pace the trades, and you compound your returns.
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.
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