Like many aspiring investors, I started my journey by trying to grow my wealth through stock investing, inspired by the strategies of Warren Buffett. At around age 21, I made my first stock trades. But there was a catch: I didn’t have much money, and the idea of waiting decades to see my wealth compound wasn’t appealing. I wanted to leverage the stock market to generate income now, not later.
This desire led me, like so many others, into the world of day trading. The appeal was obvious—outsized returns right into my brokerage account, day after day. I thought I had cracked the code. The thrill of consistent wins was exhilarating, and for a while, it felt like a never-ending party. But as many day traders eventually learn, the party doesn’t last forever. My account, which had soared by 500% at one point, was suddenly wiped out.
Despite the setback, I was convinced that the stock market held the key to earning significant returns. I just needed to figure out how to do it consistently. That’s when I discovered options. Options seemed like a way to achieve those outsized returns with even less capital. But, just like with my day trading, I quickly doubled or tripled my small account, only to lose it all just as fast.
At this point, I knew two things: I was drawn to the leverage and potential of options, and I didn’t know how to consistently predict the market’s direction.
The turning point in my journey came in August 2004, during a visit to my parents’ house on the St. Lawrence River in upstate New York. Normally, these trips were all about enjoying the river, spending time with friends and family, and just relaxing. But this trip was different. I had picked up a copy of McMillan on Options by Lawrence G. McMillan, and I couldn’t put it down. I was completely engrossed, reading it from cover to cover and diving into further research after each chapter. I was hooked.
That book gave me the foundation I needed to truly understand options trading. More importantly, it shifted my perspective. I learned two valuable things: I could use options to predict market movements, but more intriguingly, I could also use them to build trades that generated income, regardless of how the market moved.
This realization marked the beginning of my journey as a profitable options trader. I began using my programming skills to develop software that scanned the options market and media websites to identify trading opportunities. The software wasn’t magical; it simply automated the screening and trading process, helping me keep emotion out of my trading decisions.
As the internet and automated trading became more popular, my initial strategy stopped working. Too many people were onto the same idea. But through this learning process, I gained deeper insights into more advanced trading concepts. About 15 years ago, I shifted my focus to selling premium in options instead of buying it.
I discovered that the premium people are willing to pay for options decreases as expiration approaches. I realized it was far easier to sell premium than to predict with precision the direction a stock might go. This insight led me to a strategy that produced consistent monthly income—selling put credit spreads on the SPY. I knew from statistical models that during any 30-day period, the SPY only closed down more than 5% about 11% of the time. This meant I could win 89% of my trades using this approach. And win I did, month after month, year after year.
Of course, the market is always changing, and I’ve had to adjust this strategy many times over the years. I’ve also developed several other trading strategies that I continue to use daily.
What I want to communicate through this story is that generating consistent monthly income through active trading is a journey—a journey of learning, trial and error, and constant adaptation. It’s not something you set and forget; it’s a job that requires continuous monitoring, adjustment, and exploration. There’s no “secret” edge in the market. Your edge is your approach, your experience, and your willingness to evolve.
Related Topics: Options Course, Options Trading, Income Generation
