is a place where beginner, intermediate, or experienced traders come to get consistent results without taking on a ton of risk.

I’ll show you how my approach will dramatically reduce risk while allowing time decay to work in your favor.

Trading is something I’ve been doing for over 20 years. Furthermore, in order to generate more income off my trades I started trading cash secured puts and covered calls around 7 years ago. 

Target goal is 2.5% a month across all strategies using high probability trades!

Buying power changes on selling futures options due to delta

Buying power use is one of the most efficient aspects of selling futures options. In many cases you can make a worthwhile return selling a /mes or /es naked put over the same strike on SPY.

For example on 5/21/23 you can sell 26 dte .1 delta put on SPY and take in $130 using $38770 in buying power

With /mes however you only need $608 in buying power to take in $51.25. If you sold 2 contracts you would take in approximately the same amount as the SPy example for only $1216 in buying power!

The main concept for this post is analyzing how much buying power is needed to sell a naked put at different deltas. Span margin is a complicated concept but the main points are the buying power needed to initially open a trade is typically what the max loss could be after a black swan event. For example if you sell a /mes naked put and the buying power is $450, span margin calculations are determining that $450 would be the max loss on a very unlikely scenario where you not only get assigned but market continues to fall dramatically from your assigned strike price.

You would need $6547 in buying power needed to sell a .1 delta 30 DTE on /es

Now here is the buying power needed to sell a. 2 delta 30 DTE on /es

The .2 delta needs more buying power because you are more likely to get assigned. Moving up 140 points uses $2066 more buying power.

I will be writing more posts on buying power in different scenarios in the futures (get it future, I know, bad pun). All of these examples are with no other contracts in play. I will look at examples when you have other positions, strangles, and other efficient uses of buying power to obtain substantial returns with little risk.

At we look for strike prices that take in adequate return with minimal use of buying power. We also look to close trades to keep our buying power efficient. I let yearly and lifetime members know what my buying power is available compared to the net liquidating value so that members can make decisions on when to take a trade, when to close a trade they are in, or when to wait to take a new trade.


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