In my career as a chemical engineer, I learned that efficiency is everything. If you can get the same result with less energy and lower cost, you do it every time.

Strangely, most investors ignore this principle when they go shopping for stocks. They see a company they like, they check the ticker, and they click “buy” at the current market price. It’s like walking into a dealership and paying the full sticker price for a truck without even asking for a floor mat.

I prefer a different approach. I like to get paid just for waiting.

Be the House, Not the Gambler

Most people approach the stock market like a gambler at a craps table—they place their bets, cross their fingers, and hope the numbers go their way. But if you’ve ever been to Las Vegas, you know that the people making the real money aren’t the ones throwing the dice; it’s the ones owning the table.

When you sell a cash-covered put, you are essentially “becoming the house.”

Instead of chasing a stock at its current price, you make a specific deal with the market. Simply think of it as a limit order on steroids. You identify a high-quality company you actually want to own, and you name the price you are willing to pay for it—the “strike price.” Typically, we set this price 5% to 10% below where the stock is trading today.

By making this promise, you are essentially selling insurance to another investor. That investor is worried the stock might crash, so they pay you an immediate cash premium to protect them against that decline.

In this scenario, you are the insurance provider. You pocket that premium upfront. And just like an insurance company or a Vegas casino, the math is heavily tilted in your favor—”the house” usually wins. From that moment on, three things can happen, and as an investor focused on income and safety, I happen to like the odds:

• Scenario A: The “Win” on Price. The stock drops to your strike price. You are “forced” to buy a world-class company at the discount you specified, while keeping the insurance premium, which lowers your cost basis even further.
• Scenario B: The “Win” on Income. The stock stays flat or goes up. The “insurance policy” expires worthless for the buyer (which is what happens most of the time), and you keep the premium as pure profit. You then simply turn around and “insure” the next stock on your list (or repeat the trade with the same company).

By now, you might be asking: “This sounds too good to be true. Where’s the catch?” As any investor knows, there’s no free lunch. There is always a “Scenario C,” and it’s the reason why this is an investment strategy, not a magic trick.

• Scenario C: The “House” Pays Out. This happens when a stock’s share price doesn’t just dip—it collapses. If you sell a $100 insurance policy on a stock trading at $120 and it suddenly craters to $70, you are still legally obligated to buy those shares at $100. In this case, “the house” (you) has to pay out on the policy. You are left holding shares that are worth significantly less than what you just paid for them.

But we keep these “Scenario C” events to a minimum by only selling puts on high-quality, “essential” companies that have strong floors. But when the market occasionally throws an unforeseen event our way, we don’t panic—we simply flip the script.

If we are assigned shares at a price higher than the current market, we transition to another income strategy known as the covered call.

Why This Is the Ultimate Defensive Move

Most people think of options as “risky” or “aggressive.” And while some strategies certainly are, the cash-covered put is actually a defensive tool.

Think about it: If you were going to buy the stock anyway, wouldn’t you rather buy it at a 10% discount while being paid to wait? It provides a “margin of safety” that a standard market order simply cannot offer. It turns market volatility—the very thing that scares most investors—into your primary source of income.

Turning Strategy into Results

I’ve been using this “smart shopping” approach for decades. It’s the backbone of how I manage my own capital and how I guide my subscribers through turbulent markets.

These strategies are the heart of Rapier’s Income Accelerator. We focus specifically on these types of high-probability trades. By screening for the right companies and the right “insurance premiums,” we’ve been able to generate outstanding annualized yields—often in the 20% to 30% range—on companies that most people are just watching from the sidelines.

But the proof is in the pudding, as they say. Below are the results of the cash-covered put trades we opened and closed in 2025. (Those listed multiple times were traded multiple times).

For the 30 cash-covered puts closed in 2025, including rolled positions, we had:

• Average annualized return: 35.5%
• Portfolio beta: 0.93
• Assignment rate: 23.3%

One important point that sometimes gets overlooked: the average trade duration was just 134 days. That means many subscribers were able to recycle capital multiple times during the year, compounding returns.

If you chained those trades together, the 35.5% average annualized return translates into a compound annual growth rate of approximately 44.5%. And that’s before accounting for the yield earned on idle cash (which is the “cash” in the “cash-covered” put strategy).

Throughout 2025, most brokerage money market accounts paid between 3.5% and 3.9% on cash used to secure puts. When you factor that in, the effective annualized return on the cash-covered put portfolio approaches 48%.

The Bottom Line

Numbers like these are the empirical proof that you don’t have to “gamble” to beat the market. You just have to change your position at the table.

By shifting from a “Buyer” to an “Insurer,” you aren’t just hoping for a stock to go up; you are engineering a situation where you profit if it goes up, stays flat, or even dips slightly. It is the most efficient way I know to navigate the volatile markets of 2026.

So, the next time you’re tempted to click “buy” on a stock you love at full price, pause and ask yourself: Am I getting paid to shop, or am I just paying retail?

Note: Interested in learning more about Rapier’s Income Accelerator? Click here.