[Publishing orders] The market is ups and downs, did your options make or lose?

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[Investor Story] Achieving a 20% annual return on tens of millions in assets, all thanks to mastering this strategy of 'One Fish, Four Dishes'?

Earning four streams of income from a single principal!With the same investment in stocks such as... $Apple (AAPL.US)$、 $Tesla (TSLA.US)$、 $NVIDIA (NVDA.US)$Why can he earn more?

In this edition of Investor Story, we invited an active fellow investor from the Futubull community@韭菜專家, whowho transitioned from being an engineer to a 'self-taught trader'and, through analyzing market trends and wealth management strategies,has found a way to generate stable returns on capitalin the hope that it will be helpful to everyone.

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Part I: From Engineer to 'Rental Lord': How Did I Quietly Amass Wealth by Selling Options?

Hello everyone, I am an expert in financial markets. I began trading stocks in 2014 and initially opened an account with Futu becausethe transaction fees for Hong Kong stocks were much lower than those charged by banks.Later, I also discovered thattrading Hong Kong stock ADRs allowed me to save 0.1% on stamp duty for buying and selling, so I gradually shifted towards US stock trading.

At first,I started using US stock options to hedge against position volatility and improve capital efficiency.Later, I found thatby regularly selling options, I could generate a steady cash flow.Although being an options seller is a rather monotonous task with capped profits per trade, the cumulative effect of small gainscan lead to stable growth over the long term as long as risks are kept under control.

Over the past five years, by implementing options strategies, my average annualized return has been approximately 15-20%, with a maximum drawdown of only around 4% for the entire portfolio. Having experienced multiple stock market crashes, I have drawn the following conclusions:Always maintain sufficient cash reserves over the long term; cash is king. When buying at the bottom, split your positions and avoid going all in.I pay particular attention to VIX Volatility Index$CBOE Volatility S&P 500 Index (.VIX.US)$as an indicator of market sentiment: when the VIX is above 30, it favors sellers, making it suitable forselling naked puts on broad market indexes to collect premiums; simultaneously,immediately buying underlying stocks at the bottom while selling covered call combinations expiring in six months, thereby reducing the cost of establishing positions. When the VIX falls below 15, volatility is too low, and I rarely trade during such periods.

II. Unpacking the Magic of Wealth Management! How to Earn Four Streams of Income Using a Single Principal?

Futu offers a better wealth management experience compared to traditional banks. I have discovered a four-tier yield structure that allows for multi-purpose use of funds:

First-tier yield (base growth yield): A foundational portfolio consisting of Treasury ETFs, money market funds, utility stocks with strong cash flow, gold ETFs, and large-cap stocks like QQQ, making up 70% of the total.

This portion must be an extremely stable combination expected to generate an annualized return of 7%, ultimately contributing approximately 5% to the overall portfolio's annualized return. Improper allocation may result in underperformance or losses relative to the broader market. My current Hong Kong stock holdings include: $CHINA MOBILE (00941.HK)$ 、 $CLP HOLDINGS (00002.HK)$ 、 $HKELECTRIC-SS (02638.HK)$ 、 $MTR CORPORATION (00066.HK)$ 、 $SINOPEC CORP (00386.HK)$ 、 $HK & CHINA GAS (00003.HK)$ , including the soaring micro-finance money market fund (HKD), Bosera US Dollar Money Market Fund, Hong Kong government bonds, US Treasury bonds, and mainly large-cap US stock holdings. $Invesco QQQ Trust (QQQ.US)$$SPDR S&P 500 ETF (SPY.US)$ , US bond ETFs, TSLA, NVDA, AAPL, etc.;

Second-tier income (income from covered trading of underlying assets):Building on the first tier,sell call options against the long stock position to form a complete Covered Call strategy.Covered calls involve controllable risks and thus do not impact insurance payouts or purchasing power. By giving up potential future upside, investors can gain immediate additional premium income. If the stock price rises above the strike price and is exercised, profits are guaranteed; if the stock price falls, losses will be less compared to others.The strike price is typically set at a level that is easily exercisable (at-the-money, ATM), maximizing time decay while locking in premiums to the greatest extent.

Click to learn more:Covered Call

Third-tier income (collateralized underlying assets - selling put options in the U.S. equity market):Sell Put,Efficiently utilize margin to sell put optionsand as long as they are not exercised, stable income can be obtained. Personally, I prefer not to take delivery of shares, as holding too much inventory affects my mood, sothe strike price is usually set at a higher position where it is less likely to be exercised (out-of-the-money, OTM).

Click to learn more:Cash-secured Put

Fourth-tier income (collateralized underlying assets - Hong Kong IPO subscription):By utilizing Futu’s collateral function, one can participate in IPO subscriptions even without available cash.I have participated in both Hong Kong and U.S. IPOs, and recent data indicates that,whenever the margin subscription multiple exceeds 1,000 times for a Hong Kong IPO, profits were achieved during the gray market trading period.

For example, if your account holds HKD 1 million worth of stocks and the collateral ratio is 70%, this equates to HKD 700,000 in purchasing power. Subscribing to a Hong Kong IPO using 10x margin financing incurs an opportunity cost of only one day's interest plus margin financing fees, amounting to approximately HKD 100. Even if only one lot is allocated, the profit potential remains significant, making it a positive expected value proposition.

AtBullish IPO ListingAt that time, I borrowed USD through collateralizing my holdings to subscribe for new shares. The cost price of Bullish was USD 37 per share. Under HP Inc.'s preferential scheme facilitated by Futu,each person was allocated an average of 92 shares.I sold all my shares at nearly the peak price of $107 on the day of the IPO.This generated a profit of $6,440 (approximately HKD 50,000) in just one day.This outcome was alsoattributable to Futu's 'alert' function.Since the timing of the first trading day for U.S. IPOs is random, I set an alert for a 0.01% fluctuation within three minutes. This ensured that as soon as there was any price movement or trading activity after the market opened, I would immediately receive a notification. Amidst the selling pressure from a large number of arbitrageurs, this allowed me to sell at the peak price ahead of others.

III. Practical Handbook: How to Turn Option Selling into a 'Sure-Win' Long-Term Business?

Q: What are the common methods for trading options on a regular basis?

AA: Options have onlyfour basic strategies., namely Long Call / Long Put / Short Call / Short Put.

1. Long Call / Long Put:The expected value of a single-leg position is negative, so I rarely engage in such trades.

Buying options consumes time value every day,which is why I only purchase small amounts to createsupporting positions for investment purposes.By paying lower premiums, I buy deeper out-of-the-money options and transform them into multi-legged vertical spreads, which helpsreduce the margin requirement for single-leg Short Put positions and enhance capital efficiency.This method is commonly used forstocks with relatively high strike prices.。

Assuming the margin requirement for a Short Put 600 QQQ is approximately $10,000 per contract, but for a Long Put 590 + Short Put 600, the maximum margin required per pair is only $1,000, reducing the margin requirement by tenfold. This is equivalent to adding leverage, which can amplify returns, though risks will similarly be magnified.

Click to learn more:Bull Call Spread - Optimistic Cross-Price Call Option

Adding a Long Put position significantly reduces the margin requirement for the Short Put.

2. Short Call:Naked selling carries significant risk; there have been many cases in the past, so I dare not engage in it heavily.

ThereforeI prefer to adopt a Covered Call strategy using stable underlying securities as collateral.I favor Covered Calls with stable underlying assets, aiming to continuously reduce the cost basis of my positions.

When selling Calls, I typically use the 'three-tier selling method': selecting expiration dates of 7 days, 14 days, and 1 month, respectively, spreading options across different maturities and strike prices to smooth out risk and returns. The expected profit is higher and more flexible than concentrating solely on one-week options, while generating weekly cash flow. Additionally, there is a simpler version of the 'three-tier selling method': choosing expiration dates of 7 days, 1 month, and 3 months. This can either involve sell/sell/sell (pure Covered Call) or buy/sell/sell (Covered Call + calendar spread arbitrage). With long equity and Long Call positions in hand, even if early assignment occurs, I am prepared for delivery without much disruption.

3. Short Put:The only strategy suitable for long-term implementation, as it allows for premium collection while keeping the risk of assignment manageable.

Selling options is a strategy that aims for positive expected returns.Here, I prefercopying the strategies of large hedge funds:Their primary targets include AAPL, NVDA, QQQ, SPY, TSLAWaitHigh liquidity, moderate volatility, and robust fundamentals.The assets. As long as the buyer abandons the exercise of the option, I can earn this portion of the premium. If the stock price approaches the strike price, I will close out the position in advance or roll it over to the next week, preferring to cut losses rather than risk being assigned.

Dual-selling strategy（Strangle/Straddle pure naked selling) is also a strategy that can effectively utilize margin:A single margin can be used for two different directions.

Assuming the margin required for selling one Short Put is 2000 (lower margin) and the margin for one Short Call is 6000, the total margin for this pair only amounts to 6000. Subsequently, if an additional Short Put closer to the current price with a margin of 3500 (higher margin) is added, the total margin for these three positions would only require 6000 + 2000.

MyThe focus of the dual-selling strategy remains on the Put side,with a possible ratio of Put 3: Call 1, becauseI might consider taking delivery for selling naked Puts, but I would never consider selling naked Calls without holding the underlying asset.I would rather incur a loss than maintain any Call positions after the price exceeds the strike price; I will close all Call positions beforehand.

Click to learn more: Long Straddle Buy

In addition,I also participate in opportunities during earnings season to capitalize on IV Crush., butTypically, I only engage in selling Puts to profit from declining volatility.

Q: What is your view on options as an investment product?

A: Eating less brings more satisfaction, while overeating may upset the stomach.Similar totossing a fair die,where each of the six faces has an equal probability of appearing. According to the law of large numbers, if the die is rolled multiple times, the expected value (average) should approach 3.5. If you have 300 yuan and the cost per roll is 3 yuan, how would you play?Would you only bet 3 yuan per roll, or would you risk all 300 yuan in one go?The answer is:Avoid betting everything on a single roll; instead, place small, consistent bets over the long term.

When a model consistently outperforms, it is advisable topartially cash out and lock in profits.Without risk control, even with a high win rate, one might lose everything overnight.Blindly pursuing high returns makes risks uncontrollable.As mentioned above, in a dice game with 3 yuan per round, after many rounds and winning 300 yuan, one should consider partially cashing out to reduce the cost of holding positions and secure an advantageous position. Even with 600 yuan as the principal, there is still a probability that rolling a 1 continuously for 299 rounds could occur. Without proper risk management or partial profit-taking, one might eventually lose everything.

IV. Outlook on Future Market Trends: How should investors with limited capital strategize and apply the "big player" mindset?

Q: What is the outlook on future market trends and advice for beginners?

It feels like U.S. stocks are currently overbought, generally overvalued, and have significantly deviated from reasonable valuations, potentially driven higher by the depreciation of the U.S. dollar.

*Note: The interview took place in October 2025.

For novice investors or those with relatively limited capital,I believe it is best to only engage in covered call option strategies on full shares, and avoid selling puts (Sell Put). As illustrated earlier in the dice game analogy, if an investor with limited capital unexpectedly takes delivery from selling puts and incurs substantial losses, they may not have the opportunity to recover. Therefore, I have consistently emphasizedlong-term stable small-bet placements.。

For investors with relatively more capital,they can reasonably sell put options. Warren Buffett also frequently uses selling puts as an alternative to buying stocks outright. With hundreds of billions of dollars in capital, he has more flexibility in his investment strategies, and even if there are losses, the impact on his overall portfolio is minimal. If fellow investors are unsure about trading strategies, it is recommended to follow Buffett’s approach. His recent move to buy into UnitedHealth was a particularly brilliant decision.For those interested in learning about options, Futu offers free courses and simulated trading accounts for practice.There are also new customer benefits available upon account opening, so be sure to take advantage of this opportunity.

Click to learn more: Futubull Options Course

Q: Which features on Futubull do you commonly use? How is the user experience?

A: I find the mobile interface of Futubull to be the most polished,offering a very natural and smooth experience. The features I frequently refer to include:

1. Option Seller's Zone:By simply entering parameters, suitable option contracts for trading can be filtered.

2. Option Activity:Large investors' significant buying or selling within a short period must have a reason.The specific direction is crucial as it may involve 'special information'.Every large trade will appear on the interface.Additionally, it is possible to determine whether each trade was an aggressive sell or buy, and on which options exchange it was executed. The data is comprehensive, so I recommend using Futubull for analysis. Other brokerage platforms struggle to match this level of detail.

Finally, aside from studying the stock market and options, I also enjoy exploring financial institution promotions, credit card cashback strategies, and wealth management tactics. I regularly compile these insights into guides and share them in the Futubull community. Everyone is welcome to join the discussion.

5. Highlights from韭菜专家’s previous Futubull community posts

Why major investors prefer Futu: Selling options against dividend-paying stocks to generate higher returns

The Ingenious Use of Options in Leveraged Decay ETFs

Ultimate Showdown for Option Sellers: The Lone Nine Swords (CC) vs The Sunflower Manual (Neutral Strategy)

Option Selling Strategies: Applications of Normal Distribution and Bollinger Bands

Short Strangle: A Small Trick for Option Sellers to Optimize Liquidity and Maximize Capital Efficiency

The Lazy Investor’s Favorite: Dollar-Cost Averaging (and Its Application with the VIX)

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Event Deadline: From now until November 24, 2025

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Disclaimer: The content of this article was provided by@LeekExpertAccept@fellow investor has valuable insights.The interview was compiled, and the images in the text were provided by@LeekExpertThe case studies in this article are for reference only and do not constitute any investment advice. The information related to the mentioned stocks represents the personal opinion of the user and does not constitute any stock recommendations. Past performance of individual stocks does not guarantee future performance; the stock market carries risks, and investments should be made with caution.

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