Selling cash-secured puts on F

Selling a put transfers the downside between $14 and zero to you, and you are paid $0.30 per share for taking it. "Cash-secured" simply means you hold the $1,400 required to buy the shares instead of leaning on margin. Same position, honest denominator.

At August 28, 2026: above $14 the put expires worthless and you keep $30 — that is the maximum this trade can make, $30. Below it you're assigned 100 shares at $14, with an effective cost basis of $13.7 once the credit is applied. That is 6.7% below where F trades today.

The engine puts the probability of keeping the full credit at 75% on F at $14.68 with 35% ATM implied vol on the Aug 28 expiry. High win rate, capped payoff, uncapped-to-zero loss — the risk profile of every short-premium trade. It is not free money; it is a rent cheque for underwriting someone else's insurance.

Max loss is $1,370 — the strike, less the credit, times 100, if F goes to zero. That number is not theoretical on single names; it is simply unlikely. Size the position against that figure, not against the premium.

Assignment is not the loss — being assigned at $14 when F is at $11.2 is. If you are running the wheel, that is the moment the plan is tested: you own shares at a basis of $13.7 and the market disagrees.

Early assignment is an operational risk rather than a market one: it arrives on a weekend, converts a defined structure into a stock position, and requires cash you may have allocated elsewhere.

Ford is a dividend trade with an options overlay, and getting the order of those two right is the whole game. The yield is large enough that an ITM short call the night before an ex-date is a genuine early-assignment risk rather than a textbook footnote — the extrinsic value on a low-priced, low-vol contract is often less than the dividend, which is exactly the condition that makes exercise rational. Check the ex-date before every write, not once a year.

F's Aug 28 strikes are $0.5 apart near the money (3.41% of spot). That is a coarse ladder: one rung is a large fraction of the implied move, so precision on the short strike is an illusion. 11k contracts of open interest on Aug 28 is thin, and a structure that needs four separate fills will pay for it. 15 strikes on that expiry — 36% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Liquid near the money, and the penny increments on cheap contracts mean the spread is a large fraction of the credit.

Skew is ordinary — the 25-delta put implies 3.0% more vol than the 25-delta call, about what an equity surface looks like when nothing unusual is being priced. Neither side of the chain is being singled out, which is the condition under which a symmetric structure like a condor is actually symmetric. The term structure is flat inside 1.5% between the two captured expiries, so there is no calendar edge to harvest and no event visibly priced into one month over the other.

At 35% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $1.38 over 27 days — roughly −9.4% to +9.4%, or $13.3 to $16.06. The structure above sells the part of that distribution the market thinks it will not reach. Whether that is a good trade is entirely a question of whether 9.4% is too much or too little for F over 27 days — the delta table cannot answer that, and neither can we.

What actually goes wrong here, as opposed to in general: Getting called away the day before the dividend and discovering the yield you were writing calls to enhance is the yield you just forfeited.