Screening Criteria

OpenFutubull>>Market>>Options>>Seller's Zone>>Screening; Common screening conditions for Cash Secured Put and Covered Call strategies: IV Percentile>40%; total options trading volume>60,000 contracts; days to expiration 0-45; daily options trading volume/open interest>500 contracts; ROI>2%; annualized ROI>30%. Cash Secured Put: OTM probability>60%; Covered Call: OTM probability>70%;

Underlying selection rule: For each strategy, select up to four underlyings with the highest probability of profit (only one contract per stock with the highest probability); if there are fewer than four underlyings, include all. If stocks repeat, exclude contracts with lower annualized ROI and select other underlyings to ensure complementarity. The probability indicates the likelihood that the option contract will not be exercised, i.e., the out-of-the-money probability. The higher the probability, the smaller the chance of being exercised, and the greater the chance of earning stable option premiums. Data source: Futubull. All data and information in the options seller’s zone are for reference only and do not constitute any investment advice. The data is based on the closing price of the previous trading day.

Cash Secured Put

• Minimum unit of strategy combination example: Sell 1 contract $IREN Ltd (IREN.US)$ 20260206 47.00P

Estimated required margin: $4,700 ($47 × 100)

Premium received: $110.50

8-day return rate: 2.41% ($110.50 ÷ ($4,700 - $110.50))

Annualized return rate: 105.14%

Break-even point: $45.895 ($47 - $1.105)

IREN's share price benefits from the AI industry funding boom and expectations of a $9.7 billion cloud service agreement with Microsoft. Analysts maintain a buy rating with a target price of $94.

• Minimum unit of strategy combination example: Sell 1 contract $Carvana (CVNA.US)$ 20260220 300.00P

Estimated required margin: $30,000 ($300 × 100)

Premium received: $802.50

22-day return: 2.75% ($802.50 ÷ ($30,000 - $802.50))

Annualized return: 44.87%

Break-even point: $291.975 ($300 - $8.025)

Carvana's stock price plunged over 20% at one point after short-selling firm Gotham City Research released a report accusing the company of inflating profits by more than $1 billion for 2023-2024 through related-party transactions and of accounting issues.

• Minimum unit of strategy combination example: Sell 1 contract $Applied Digital (APLD.US)$20260206 34.00P

Estimated required margin: $3,400 ($34 × 100)

Premium received: $83.00

8-day return: 2.50% ($83.00 ÷ ($3,400 - $83.00))

Annualized return: 109.28%

Break-even point: $33.170 ($34 - $0.830)

Applied Digital has commenced construction of the Delta Forge 1 AI data center campus. Northland Securities raised its target price from $40 to $56, and NVIDIA's $2 billion investment in partner CoreWeave boosted expectations for AI infrastructure demand.

• Minimum unit of strategy combination example: Sell 1 contract $Lam Research (LRCX.US)$20260220 207.50P

Estimated required margin: $20,750 ($207.5 × 100).

Premium received: $410.00.

22-day return rate: 2.02% ($410.00 ÷ ($20,750 - $410.00)).

Annualized return rate: 32.91%.

Break-even point: $203.400 ($207.5 - $4.100).

Lam Research reported Q2 earnings with revenue surpassing expectations at $5.34 billion and EPS at $1.27. The company raised its Q3 guidance to $5.7 billion in revenue, prompting several investment banks to significantly increase their target price to $300.

Covered Call

• Minimum unit of strategy combination example: Sell 1 contract $Hecla Mining (HL.US)$20260220 36.00C

Simultaneously purchase 100 shares of HL: $2,719 ($27.19 × 100).

Premium received: $90.00

22-day return rate: 3.42% ($90.00 ÷ ($3,600 - $90.00))

Annualized return rate: 55.89%

Break-even point: $35.100 ($36 - $0.900)

Hecla Mining's production guidance for 2026 indicates a projected decline in silver output by 3-11% to 15.1-16.5 million ounces and a decrease in gold production by 3-10.9% to 134,000-146,000 ounces, leading to a 5.5% drop in share price. However, multiple analysts have raised their target prices, with CIBC increasing it to $32 and HC Wainwright raising it to $36.5.

• Minimum unit of strategy combination example: Sell 1 contract $AST SpaceMobile (ASTS.US)$20260220 150.00C

Simultaneously purchase 100 shares of ASTS: $12,123 ($121.23 × 100)

Premium received: $430.00

22-day return rate: 3.68% ($430.00 ÷ ($15,000 - $430.00))

Annualized return rate: 60.04%

Break-even point: $145.700 ($150 - $4.300)

AST SpaceMobile confirmed that the BlueBird 7 satellite will be launched on Blue Origin's New Glenn rocket by the end of February. Meanwhile, it has been selected to participate in the U.S. Missile Defense Agency's SHIELD program. Rumors about SpaceX's IPO have driven an overall rise in the space stock sector.

• Minimum unit of strategy combination example: Sell 1 contract $CoreWeave (CRWV.US)$20260220 130.00C

Simultaneously purchase 100 shares of CRWV for $10,602 ($106.02 × 100).

Premium received: $287.00

22-day return rate: 2.78% ($287.00 ÷ ($13,000 - $287.00))

Annualized return rate: 45.42%

Break-even point: $127.130 ($130 - $2.870)

NVIDIA invested an additional $2 billion in CoreWeave, becoming the second-largest shareholder. The two parties will deepen their cooperation to accelerate the construction of AI data centers. Meanwhile, company directors and executives recently sold a significant number of shares, with a total value exceeding $70 million.

• Minimum unit of strategy combination example: Sell 1 contract $Snap Inc (SNAP.US)$20260206 9.00C

Simultaneously purchase 100 shares of SNAP: $767 ($7.67 × 100).

Premium received: $22.50.

8-day return rate: 3.02% ($22.50 ÷ ($900 - $22.50)).

Annualized return rate: 132%.

Break-even point: $8.775 ($9 - $0.225).

Snap Inc. has established an independent subsidiary, Specs Inc, to focus on its AR smart glasses business and seek external investment, while reaching a settlement with plaintiffs in a social media addiction lawsuit.

What is a Cash Secured Put?

- Sell put options on stocks you are willing to hold.
- You can collect the premium immediately – if the option expires worthless, this represents your maximum profit.
- If the stock falls below the strike price at expiration, you may be assigned and required to buy 100 shares per contract at the strike price (net cost = strike price - premium).
- You maintain sufficient cash to cover the potential purchase obligation, hence the term 'cash secured.'

Typical uses:

- Income generation: Collect premiums regularly to generate returns.
- Discounted buying: Acquire shares at a lower effective price.

What is a Covered Call?

- You already own the stock and sell the corresponding call options (i.e., 'covered call').
- You can immediately collect the premium as income.
- If the stock price is below the strike price, the option expires worthless, and you retain both the stock and the premium.
- If the stock price is above the strike price, you must sell the stock at the strike price (upside potential is capped), but you still retain the premium.

Typical uses:

- Income Generation: Earn additional option income while holding the stock.
- Exit Strategy: Achieve additional gains while selling the stock at the target price.

Strategy Tips

- Focus on high-probability trades to enhance safety.
- MonitorImplied volatility(IV) - A higher IV implies a higher premium, but also indicates greater price volatility.

Risk Warning
An option is a contract that grants the holder the right, but not the obligation, to buy or sell an asset at a fixed price on a specified date or at any time before that date. The price of an option is influenced by various factors, including the current price of the underlying asset, the strike price, the time to expiration, and implied volatility.
Implied volatility reflects the market's expectations regarding the future fluctuations of the option over a certain period. It is derived inversely through the Black-Scholes option pricing model and is generally considered an indicator of market sentiment. When investors anticipate greater volatility, they may be willing to pay a higher price for options to hedge risks, leading to higher implied volatility.
Traders and investors use implied volatility to evaluateoption pricethe attractiveness, identify potential mispricings, and manage risk exposure.

Disclaimer

Part of the above information is automatically generated by third-party artificial intelligence models based on data and information. It does not represent any position of Futu. While the relevant information will assist you in making investment decisions, it does not constitute any investment advice. You may only use the materials on this website for personal reference and non-commercial purposes. The information on this website is provided on an "as-is" and "as-available" basis. Futu Securities and/or its affiliated companies have taken all reasonable precautions to ensure that the information contained on this website was accurate, timely, complete, suitable for the intended purpose, and compliant with applicable laws and regulations at the time of publication. The Futu Group makes no express or implied warranties or representations regarding the accuracy, timeliness, or completeness of the information contained on this website. By accessing the relevant information, you fully understand and agree to be bound by the associated terms and conditions. Any person taking action based on the relevant content shall bear the associated risks at their own responsibility.

This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee concerning securities, financial products, or tools. The risk of loss in buying and selling options can be substantial. In some cases, the losses incurred may exceed the initial margin deposit. Even if you set contingent orders, such as 'stop-loss' or 'limit' orders, such orders may not prevent losses. Market conditions may render these instructions unexecutable. You may be required to deposit additional margins within a short period. If you fail to provide the required amount within the specified timeframe, your open positions may be liquidated. However, you will still be responsible for any shortfall in your account resulting from such liquidation. Therefore, before trading, you should study and understand options, and carefully consider whether such trading suits your financial situation and investment objectives. If you trade options, you should familiarize yourself with the procedures upon exercising options and at their expiration, as well as your rights and obligations when exercising options and upon their expiration. Option trading involves extremely high risks and is not suitable for all investors. Investors should read carefullyCharacteristics and Risks of Standardized Options。

Make full use of the options seller zone to understand income strategies for selling options.Earn option premiums!

Editor/Rocky