A System for Targeting a 10-15% Return with a $25k Options Account

I built this playbook on a single thesis: by systematically selling options with an 80% probability of expiring worthless, an investor can safely generate a consistent 10-15% annual income stream.

This system is specifically adapted for investors looking to turn even a small account - starting with as little as $25,000 - into a predictable, income-generating business.

The goal is to learn how to implement a professional-grade system with the realistic aim of safely generating a 10-15% annualized return, delivered as a steady monthly cash flow.

By the time you finish reading, you will understand:

1. The Strategy: How to sell put options to get paid to buy an asset at a discount, and then sell call options to get paid again while you hold it.

2. The Rules: A four-point, non-negotiable checklist that filters for only high-probability, high-premium opportunities, putting the statistical odds firmly in your favor.

3. The System: The exact mechanics for managing winners (taking profits at 50%) and protecting capital, turning trading from an emotional gamble into a calm, repeatable process.

Let's begin.

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Your First Three Steps: Building a Professional Foundation

These steps are not optional.
Before you place a single trade, you must prepare like a pro.

1. Get Approved for the Right Tools.
   This system requires the ability to sell options on futures. Log in to your brokerage account and apply for the appropriate permissions. This will typically involve enabling both margin and futures trading, as well as a specific options approval level that allows for selling spreads. Be honest in your application. If you need help, call your broker's trade desk; they are there to help you.

2. Paper Trade First: This Is Mandatory.
   You should not risk money after just reading this article, this is not enough. Open a paper trading (simulated) account. For at least one full month, execute this playbook exactly as written. Get a feel for the rhythm of the market, the mechanics of placing orders, and the emotional response to watching a trade move for or against you.
   This is your free education. Do not skip it.

3. Start Small. Impossibly Small.
   Once you've proven you can follow the system in a paper account, you can go live. Your first live trades must be for the smallest possible size: one single contract. Your goal for the first three months of live trading is not to make money. Your goal is to execute the process flawlessly and manage your emotions. Master the process, and the income will inevitably follow.

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This System is a Continuous Cycle with Two Primary Phases("The Wheel")

We are always in one of these two states, methodically generating income.

• Phase 1: Selling Puts. We are in cash and want to own the market at a discount. We generate income by selling someone the right to sell the market to us at a lower price.

• Phase 2: Selling Covered Calls. We now own the market. We generate income by selling someone the right to buy the market from us at a higher price.

Let's dive deep into Phase 1.

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Phase 1: Selling Puts to Generate Income and Initiate Positions

The Core Concept:

Selling a put option is like getting paid to place a limit order. You are telling the market, "I am willing to buy the S&P 500 if it drops to price X, and I want you to pay me today for making that commitment."

The Asset:

We will use the Micro E-mini S&P 500 futures (/MES). It trades directly based on the S&P 500 index, has significant tax advantages (more on that later), and is 1/10th the size of the standard E-mini contract.
This smaller size makes it the perfect tool for accounts under $100,000, as it allows for precise position-sizing and risk management.

The Pre-Flight Checklist: My Non-Negotiable Rules for Selling Puts

This checklist is your shield.

It protects you from your own emotions and ensures you only enter high-probability trades.

If a trade does not pass every single one of these filters, we do not take it. Period.

If you are a premium member, please scroll down for the checklist.

Not a member yet? Unlock the Complete Playbook to Build Your Income Business

You've understood the thesis. Now it's time to get the engine.

Behind this paywall is the complete, operational blueprint you need to turn this strategy into a repeatable, income-generating business. This isn't more theory; this is the step-by-step, professional-grade system in its entirety.

By unlocking the full article, you will gain immediate access to:

• The 5 Core Rules of the System: We reveal the exact, non-negotiable numbers for the 4-Point Pre-Flight Checklist plus the unbreakable Position Sizing Rule. You'll learn the specific threshold on the VIX, the market trend filter, the precise Delta for an 80% probability, and the risk management rule that guarantees your survival.

• The Step-by-Step Mechanics for Trade Entry & Risk Management: We walk you through structuring the perfect trade for a small account using Put Credit Spreads, showing how to apply the core rules in practice.

• The Professional's Trade Management System: See the "Active Trade Management" flowchart come to life. Discover the simple 50% profit rule for winners and get our full Decision Tree for managing challenged trades. You'll learn exactly when to cut a loss versus when to "roll" a position—a skill that separates amateurs from professionals.

• The "Wheel" in Full Motion: We detail the second phase of the system, showing you exactly how to sell covered calls against your position to generate another layer of income, as visualized in the "Two Profitable Outcomes."

• The "Trade Ladder" Concept in Action: We move from theory to reality with a visual, week-by-week portfolio breakdown for a $25,000 account. You will see, with explicit numbers, how a "Mechanical" operator can generate a 9.6% return... and then we'll reveal the key adjustments a "Professional" operator makes to elevate that same system to a potential 15.6% annual income stream.

• The Critical Tax-Saving Advantage: Learn about the Section 1256 tax treatment that gives this specific strategy a significant edge, letting you keep more of what you earn.

Stop guessing and start executing. Unlock the rest of this guide and get the complete system, the exact rules, and the mathematical framework for building a reliable monthly income stream from the markets.