A 90% Success Rate Trading Options?

I know winning on 9 out of 10 option trades sounds too good to be true.

So let me preface today’s article by saying…

I have been recommending real put sells to members of The War Room since its inception in May 2019.

That proves I’m not cherry-picking a small subsection of my trades.

In fact, between 2019 and now, I’ve made dozens of put sell recommendations.

My initial goal was to win 80% of the time.

It turns out that goal was too low, though… because we are at over a 90% win rate since inception!

But what do I really mean when I say “win”?

To me, winning on these trades means avoiding “getting put” – that is, avoiding being forced to buy shares of the underlying stock.

Getting put occasionally is fine, since we don’t sell puts unless we’d be comfortable owning the shares.

But things can change fast, and sometimes we get stuck in a losing trade because we don’t have time to adjust.

At the risk of sounding pessimistic, I’ll tell you that you will have losses when trading options – that’s inevitable.

But by using this strategy and position sizing, you can limit the effects of any loss.

Picking the right parameters

To ensure I give myself ample time to adjust, I usually sell longer-term puts. Sometimes I even trade long-term equity anticipation securities (LEAPS), which have more than a year until expiration.

But even with the LEAPS included, our average holding time for these trades is just over three months. This is because we almost always close out the trades early once we achieve our target returns.

Now, I do occasionally trade short-term puts – but only under certain parameters.

When I look for put sell candidates, I use the same criteria I would use if I were looking to buy stocks. I don’t chase premium – that’s the quickest way to end up in the poorhouse.

Sure, I could get a much bigger premium if I chased a company like Roku (ROKU), Beyond Meat (BYND) or Tesla (TSLA), but I know that the probability of getting put on a company like those is very high.

And I don’t want to get a call from my broker asking me to pony up a ton of cash for a trade that’s gone south.

Focus on strike price

The only time I sell a put is when I can get a strike price that is 20% to 50% below the market price. Also, the potential return on the trade must be in the double digits, and the probability of getting put must be lower than 20%.

By following these criteria, I have been able to minimize my losses and maximize my gains.

The goal is to make at least 50% of the premium that I received when I initially sold the put. So if I sold the put for $2, I am looking to pay $1 or less when I close out the position.

Again, I don’t care about the time horizon as much as I care about whether the trade meets my criteria.

I’ve sold many LEAPS puts that had more than a year until expiration, and I often close them out in just a couple of months.

The 4 crucial elements of trading options

The key to trading options is understanding how they are priced and how they react to moves in share price.

There are four factors that affect the price of an option:

  • The amount of time until expiration
  • The volatility of the market
  • The option’s strike price
  • The underlying company.

It’s important to stay disciplined no matter what happens – especially amid negative market sentiment.

The worst-case scenario with a put sell is we end up in a sector that is getting pounded mercilessly or in a company that is cooking its books.

That’s always a possibility, which is why position sizing is critical.

By having a 20% to 50% cushion on the downside, which I mentioned above, you also can eliminate the need for additional protection.

However, that doesn’t mean you can’t buy extra protection – or that you shouldn’t adapt your strategy so you can sleep better at night.

And while market downdrafts can be difficult to trade in if they last, they can actually provide better put sell opportunities. In fact, some of my best put sells have taken place during market crashes or corrections.



Knowing these trading secrets has enabled me to maintain a 90% win rate on put sells in The War Room since 2019. If you’re ready to start following along, I invite you to join me – you’ll learn how to enter and exit an option trade to minimize risk and maximize return.

Click here to start trading alongside me today.