Jack Carter Trading

Hey traders,

I’ve said it a hundred times: selling puts is one of my favorite strategies.

You get paid up front, you control your risk, and if the stock comes to you, you own it at a discount.

But the question I hear over and over is: “Jack, how do you pick the right strike?”

The Two Things I Look At

When I’m choosing a strike price for a naked put, I keep it simple.

First, I look at return on capital. How much premium am I collecting versus the buying power the broker’s holding? I want that payout to make sense — something that’s worth my time.

Second, I look at support levels on the chart. If a stock has bounced off a certain price three or four times, chances are that level will act like a floor again. Selling puts just below that support stacks the odds in my favor.

A Quick Example

Let’s say a stock’s trading at $70. The 65-strike puts are paying $1.50.

If I sell those, I’m committing to buy at an effective cost basis of $63.50.

That’s not bad if the chart shows buyers stepping in around $64–65. It means I’m being paid up front to take on stock where others have already proven willing to step in.

Why This Works

Picking strikes isn’t about magic formulas. It’s about combining the numbers with common sense.

The premium tells you if the trade is worth it.
The chart tells you where the stock is likely to find a floor.

Stack those two together and you’ve got a logical, risk-defined trade.

The Takeaway

When I sell naked puts, I’m not throwing darts at a board.

I’m looking for the sweet spot where the premium makes sense and the chart gives me backup.

That way, if I get assigned, I’m owning stock at a price I can live with. And if I don’t, I still keep the cash.

That’s how I pick my strikes — and it’s why selling puts has been a cornerstone of my trading for decades.

Trade well,

Jack Carter

P.S. September has a long history of tripping up tech stocks. That’s why I held a prep class — to walk through what happens if the leaders stumble and how to position smartly. Get your front-row access here.

The tech-heavy NASDAQ doesn’t have a good record in September. Truth be told, it’s downright negative.
Are we headed for a tech-sector breakdown? Find out!

To help you discover the power of trends, every week I share with you a handful of the top trending stocks.

These stocks are picked by my purpose-built, custom-made TrendPoint software to pick the strongest trending stocks in the market right now.

If you know anything about me, you know that every trade I get into starts with a trending stock.

Unless a stock is in a strong trend, I don’t want to hear about it. In my book, wishy washy stocks are the quickest way to losing money.

This Week’s Stocks

You’ve been hearing it for weeks… “the market’s ready to sell off”

But we’ve ignored the noise and followed the trend… and it’s paid off for us.

This week, the trend is still bullish, so I’ve got 3 more bullish stocks for you:

AEM
ANET
NEM

What can you do with these stocks?

Well, there are a couple of things you could consider — after doing your own research, of course:

Buy or short — For bullish stocks, this is probably the simplest thing you could do. Then just wait for it to go up and sell when you hit a profit target you’re comfortable with. This is only for upward-trending stocks we’re long on.

For downward-trending stocks (those that we’re bearish on), you can short them. This is a little more advanced, so if you’re just getting started, I wouldn’t recommend this play. Remember, just like buying a stock, shorting comes with unlimited risk if the stock moves against you, so always have a clear stop-loss in place.
You could buy an option.

For bullish stocks, this means buying a call option.
For bearish stocks, this means buying a put option.

You know I’m not a fan of speculative plays, but every once in a while it doesn’t hurt to throw a little cash at a speculative option. Just remember, while options can move bigtime if the stock goes up… the downside of options is that you have a time limit on how quickly you need the stock to make that move.

So think about your risk tolerance when you consider buying calls on bullish stocks or buying puts on bearish stocks.
You could collect instant income.

If you’ve been following me for any length of time, you know that I’m a big fan of income plays, because they massively increase your odds of winning. We do this by SELLING options instead of buying them.

Not only do income plays let you get paid instantly — as soon as you place the trade. You massively increase your odds of winning, because the way we trade them, you don’t have to be 100% right about the direction of the stock.

If you haven’t tried your hand at income trading yet, I urge you to try this exercise for yourself. Without risking any money, it will really let you see the power of income trading and why it’s my favorite method.

Income plays on bullish stocks can be naked puts, covered calls or a bull put spread.

Income plays on bearish stocks will be a little more complicated. But if you’re a more advanced trader, you can look into doing a short term bear call spread, which involves selling an out-of-the-money call and buying a call one strike price higher.

That’s all for now.

Stay tuned, because I’ll be sending you a new list of TrendPoint Best Trending Stocks every week! (usually Mondays)