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 $Strategy (MSTR.US)$20260227 110.00P

Estimated required margin: $11,000 ($110 × 100)

Premium received: $240.50

24-day return rate: 2.23% ($240.50 ÷ ($11,000 - $240.50))

Annualized return rate: 33.48%

Break-even point: $107.595 ($110 - $2.405)

Strategy continued purchasing 855 Bitcoins at an average price of $87,974 after Bitcoin fell below the cost line of $76,000, but soon faced a paper loss with its stock price declining by 7%. Market concerns arose regarding the sustainability of its leveraged cryptocurrency strategy.

• Minimum unit of strategy combination example: Sell 1 contract $SanDisk (SNDK.US)$20260220 540.00P

Estimated required margin: $54,000 ($540 × 100)

Premium received: $1,620.00

17-day return: 3.09% ($1620.00 ÷ ($54,000 - $1620.00))

Annualized return: 64.98%

Break-even point: $523,800 ($540 - $16,200)

SanDisk extends joint venture agreement with Kioxia to 2034 to support AI flash memory production; Bernstein raises target price to $1000, with analysts expecting the storage sector to become the new favorite for capital flows, taking over from precious metals.

• Minimum unit of strategy combination example: Sell 1 contract $Palantir (PLTR.US)$20260213 130.00P

Estimated required margin: $13,000 ($130 × 100)

Premium received: $264.50

10-day return: 2.08% ($264.50 ÷ ($13,000 - $264.50))

Annualized return: 73.10%

Break-even point: $127.355 ($130 - $2.645)

Palantir released a better-than-expected Q4 earnings report, with revenue growing 70% year-over-year to $1.41 billion. Revenue from the U.S. commercial sector surged 137%. The company's full-year 2026 revenue guidance of $7.18-$7.2 billion far exceeded analysts' expectations of $6.27 billion, driving an 11% pre-market rise in its stock price.

• Minimum unit of strategy combination example: Sell 1 contract $Super Micro Computer (SMCI.US)$20260206 26.50P

Estimated required margin: $2,650 ($26.5 × 100).

Premium received: $57.00.

3-day return rate: 2.20% ($57.00 ÷ ($2,650 - $57.00)).

Annualized return rate: 238.07%.

Break-even point: $25.930 ($26.5 - $0.570).

Super Micro Computer will release its Q2 earnings report on February 3. Analysts expect earnings per share of $0.46, while the options market anticipates an 11.92% stock price movement. Investors are focused on demand for AI servers and sales growth driven by NVIDIA's Blackwell GPU.

Covered Call

• Minimum unit of strategy combination example: Sell 1 contract $GameStop (GME.US)$20260227 35.00C

Simultaneously purchase 100 shares of GME: $2,585 ($25.85 × 100).

Premium received: $51.50

24-day return rate: 2.03% ($51.50 ÷ ($3,500 - $51.50))

Annualized return rate: 30.44%

Break-even point: $34.485 ($35 - $0.515)

GameStop CEO Ryan Cohen announced plans for a major acquisition targeting a larger consumer-focused company. This move is described as an unprecedented transformative transaction in capital market history and may elevate the company's market value to hundreds of billions of dollars.

• Minimum unit of the strategy portfolio, for example: sell 1 contract.$Rocket Lab (RKLB.US)$20260227 100.00C

Simultaneously purchase 100 shares of RKLB: $7,415 ($74.15 × 100)

Premium received: $169.50

24-day return rate: 2.34% ($169.50 ÷ ($10,000 - $169.50))

Annualized return rate: 35.04%

Break-even point: $98.305 ($100 - $1.695)

Rocket Lab's stock price fell after Congress canceled a $4 billion Mars sample return project, for which the company had proposed a mission by 2031. Meanwhile, the company completed two Electron rocket launches within eight days but encountered a tank rupture during Neutron rocket testing.

• Minimum unit of strategy combination example: Sell 1 contract $IREN Ltd (IREN.US)$20260220 75.00C

Simultaneously purchase 100 shares of IREN: $5,308 ($53.08 × 100)

Received premium: $115.00

17-day return rate: 2.21% ($115.00 ÷ ($7,500 - $115.00))

Annualized return rate: 46.53%

Break-even point: $73.850 ($75 - $1.150)

IREN signed a $9.7 billion cloud service agreement with Microsoft and purchased GPUs from Dell. The company shifted its focus from Bitcoin mining to AI cloud infrastructure business. Meanwhile, Bitcoin prices fell below $75,000, causing widespread declines in cryptocurrency-related stocks.

• Minimum unit of strategy combination example: Sell 1 contract $Unity Software (U.US)$20260220 37.00C

Simultaneously purchase 100 shares of U: $2,881 ($28.81 × 100).

Premium received: $67.00.

17-day return rate: 2.38% ($67.00 ÷ ($3,700 - $67.00)).

Annualized return rate: 50.03%.

Break-even point: $36.330 ($37 - $0.670).

Unity Software plummeted 24% amid a panic sell-off in gaming stocks triggered by Google's release of Project Genie world model. However, the CEO stated that AI world models are an accelerator rather than a threat for Unity, and analysts believe the market reaction was excessive, leading to a subsequent rebound in the stock price.

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.
- Monitor implied volatility (IV) — higher IV means higher premiums but also greater price fluctuations.

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 price.the 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。

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Editor/Rocky