Week 1 Paper Trades — Cash-Secured Puts
Setup
- Platform: Robinhood (execution) + manual paper tracking
- Capital allocated: $10,000 for paper trades (represents 2-3% of typical portfolio)
- Date: 2026-05-04
- Strategy: Cash-Secured Puts (CSP)
- Objective: Learn to generate income while expressing willingness to own at discount
Current Prices (as of May 4, 2026)
| Ticker | Price | Sector | Thesis |
|---|---|---|---|
| RIVN | $15.02 | EV / Auto | Legacy auto dying, but EV pure-plays risky. Want to own cheaper. |
| CCJ | $120.60 | Uranium / Mining | Nuclear renaissance thesis, supply constraints. |
| RGTI | $17.50 | Quantum Computing | Speculative, but "moonshot" category you like. |
Candidate CSP Trades
RIVN — Rivian Automotive
- Price: $15.02
- CSP idea: Sell $13 strike put, 30-45 DTE
- Why $13: ~13% below current, aligns with recent lows (~$15). If assigned, cost basis = $13 - premium.
- Estimated premium: ~$0.40-0.60 (depends on exact expiration)
- Capital required: $1,300 per contract
- Annualized return if not assigned: ~15-25%
- Would you own at $13? YES — that's an $11.5B market cap, down 86% from highs.
CCJ — Cameco
- Price: $120.60
- CSP idea: Sell $110 strike put, 30-45 DTE
- Why $110: ~9% below current, near support levels. CCJ has been volatile but uranium thesis intact.
- Estimated premium: ~$1.50-2.50
- Capital required: $11,000 per contract
- Annualized return if not assigned: ~12-18%
- Would you own at $110? YES — largest uranium miner, nuclear renaissance real.
RGTI — Rigetti Computing
- Price: $17.50
- CSP idea: Sell $15 strike put, 30-45 DTE
- Why $15: ~14% below current, quantum computing pure-play with commercial contracts.
- Estimated premium: ~$0.60-1.00
- Capital required: $1,500 per contract
- Annualized return if not assigned: ~18-30%
- Would you own at $15? YES — speculative but aligned with your "ten bagger" interest.
Paper Trade Selection
Recommended first trade: RIVN $13 put
Reasoning:
1. Lowest capital requirement ($1,300)
2. Highest conviction on "would I own here?"
3. Most liquid options chain (52M daily volume)
4. Teaches assignment psychology on a beaten-down name
Alternative if RIVN IV too low: RGTI $15 put
- Higher IV = richer premium
- Smaller position = less capital tie-up
- More speculative = tests your risk tolerance early
Paper Trade — ACTUAL EXECUTION
Date: 2026-05-04
Ticker: RIVN
Strategy: Cash-Secured Put
Strike: $13.00
Expiration: June 18, 2026 (44 DTE)
Premium received: $0.40 (at the mark)
Capital at risk: $1,300 per contract
Breakeven: $12.60
IV: 58.66% (high — rich premium environment)
Delta: 0.2058 (~20% probability of ITM at expiry)
Chance of profit: 77.78%
Volume: 590 | Open interest: 12,077 (liquid)
Key Greeks:
- Delta: 0.2058 (low — ~20% chance of assignment)
- Gamma: -0.0915 (acceleration risk if RIVN drops hard)
- Theta: 0.0094 (~$0.94/day time decay in your favor)
- Vega: -0.0151 (you're short volatility — if IV drops, you win)
Trade Quality Assessment:
✅ Delta 0.20 — lower than 0.30 target, meaning lower assignment risk
✅ IV at 58.66% — high volatility = rich premium. You're being paid for risk.
✅ 77.78% probability of profit — statistically favorable
✅ 44 DTE — sweet spot for theta decay without excessive gamma risk
⚠️ Premium $0.40 = 3.1% of capital at risk — slightly below 4% target but acceptable for lower delta
Annualized return if not assigned: ($0.40 / $1,300) × (365 / 44) = 25.5%
What this means:
- If RIVN stays above $13 through June 18: you keep $40 per contract (3.1% in 44 days)
- If RIVN drops below $13: you buy 100 shares at $13, but your true cost is $12.60 (strike minus premium)
- At $12.60 breakeven, RIVN would need to fall 16.1% from current $15.02
Scenario analysis:
| RIVN at expiry | Outcome | P&L per contract |
|----------------|---------|------------------|
| $16.00 | Expire worthless | +$40 |
| $14.00 | Expire worthless | +$40 |
| $13.00 | Expire worthless | +$40 |
| $12.00 | Assigned, immediate paper loss | -$60 (bought at $13, worth $12) |
| $10.00 | Assigned, larger loss | -$260 |
| $5.00 | Assigned, significant loss | -$760 |
Adjustment triggers:
- RIVN drops to $13.50 (near strike): Monitor, consider rolling down/out
- RIVN drops to $12.50 (below breakeven): Roll to $12 strike, July expiration, or accept assignment
- RIVN rips to $17+: Let expire worthless, keep premium, re-evaluate new CSP
Emotion checkpoint:
- Are you okay owning RIVN at $12.60 true cost? YES/NO
- If RIVN drops to $11 next week, do you double down or cut loss?
- What's your reaction if this expires worthless vs. if you're assigned?
Director's pre-trade decisions:
1. Rolling: "Talk me through pros/cons" → See rolling guide below
2. Profit taking: "I'd take profit" → Plan: close at 50% of max gain ($0.20) if reached in first 2-3 weeks
3. Capital comfort: "Low risk, 3.1% is a hair worse than my bank HSA" → Confirms position sizing appropriate
Rolling Guide: When and How
What is rolling?
Close current position + open new position at different strike/expiration.
Rolling DOWN (strike)
When: Stock dropped, you're near/at assignment, still bullish long-term
How: Buy back $13 put, sell $12 put (further out)
Pros:
- Reduces assignment risk
- Maintains exposure to name
- Can collect additional premium if vol still elevated
Cons:
- Realizes loss on original put (buy back for more than you sold)
- Increases capital at risk (lower strike = more downside if stock keeps falling)
- Can become "catching a falling knife" if thesis is broken
Rolling OUT (expiration)
When: Need more time for thesis to play out
How: Buy back June put, sell July put at same strike
Pros:
- More time for recovery
- Additional theta collection
- Avoids assignment today
Cons:
- Pays to buy back near-term put (often at a loss)
- Ties up capital longer
- "Throwing good money after bad" if thesis is wrong
Rolling DOWN AND OUT
When: Stock dropped, you want lower strike + more time
How: Buy back $13 June, sell $12 July
Pros:
- Lower assignment price
- More time
- May collect net credit if vol is still high
Cons:
- Most complex — two variables moving against you
- Higher total risk if name keeps falling
- Easy to turn a small loss into a large one
When NOT to roll:
- Thesis is broken — if RIVN's Amazon contract is cancelled, rolling is denial
- Better opportunities exist — capital tied up in a loser has opportunity cost
- You've reached max pain tolerance — accept assignment or cut loss
Rolling math example:
Current: Sold $13 put for $0.40. RIVN drops to $12. Put now worth $0.80.
Roll down/out: Buy back at $0.80 (loss of $0.40), sell $12 July put for $0.60.
Net: -$0.40 + $0.60 = +$0.20 additional credit, but now at $12 strike.
True cost if assigned: $12 - $0.60 = $11.40 (vs. original $12.60).
Key question: Is $11.40 a price you'd happily own RIVN? If yes, roll. If no, accept loss or cut.
Matt's rolling framework (pre-committed):
- Roll if: Thesis intact, vol still elevated, lower strike is attractive entry
- Don't roll if: Thesis broken, opportunity cost too high, or rolling would exceed 5% of portfolio
- Maximum rolls per position: 2. After that, accept assignment or cut loss.
Execution Confirmation
Paper trade status: ✅ EXECUTED
Execution time: 2026-05-04 03:03 UTC
Platform: Robinhood
Confirmation: Received
Post-Execution Notes
Immediate feelings: (Log these now while fresh)
- Relief? Excitement? Anxiety? Neutral?
- Are you already checking RIVN price?
- Do you feel "naked" without owning the shares, or empowered by the premium?
First 48 hours:
- RIVN will move. It might move against you immediately.
- Your job: observe your emotional reaction, not intervene.
- Theta decay is your friend — ~$0.94/day in your favor.
Week 1 checklist:
- [x] Log execution details (fill price: $0.40, time: 03:03 UTC)
- [x] Set price alerts: $13.50 (watch), $13.00 (strike), $12.60 (breakeven), $12.00 (adjustment)
- [x] Note opening portfolio value: $0.40 credit received
- [x] Wednesday check-in: How's RIVN? Any news? Emotion status?
- [ ] Friday review: Week 1 P&L on paper, lessons learned
Wednesday 2026-05-06 Check-In
RIVN Price Action:
| Date | Close | Change | Notes |
|------|-------|--------|-------|
| Apr 30 | $16.40 | — | Pre-trade baseline |
| May 1 | $15.02 | -8.4% | Day before our entry |
| May 4 | $14.51 | -3.4% | Trade day (entry) |
| May 5 | $14.60 | +0.6% | Slight bounce |
| May 6 | $14.69 | +0.6% | Current (intraday range $14.48-$14.79) |
Position Status:
- Days in trade: 2
- Current RIVN: $14.69 (vs. $15.02 at entry)
- Distance to strike: $13.00 — RIVN needs to fall 11.5% further to hit strike
- Distance to breakeven ($12.60): needs to fall 14.2% further
- Probability of profit: Still ~75%+ (delta decaying with time)
What's Changed:
- RIVN down 2.2% from our entry ($15.02 → $14.69)
- But: not accelerating toward strike. Moving sideways in a $14.50-$15.00 range
- Theta has worked ~$1.88 in your favor over 2 days
- Your "buffer" has narrowed from 13.5% OTM to 11.5% OTM — still healthy
Emotion Check:
- Only checked 1x yesterday ✅ Good discipline
- RIVN isn't ripping to $17 (missed FOMO) nor crashing to $12 (panic) — it's just chopping
- This is what 80% of option selling feels like: boredom, not drama
Key Insight:
The whole point of the CSP was to collect premium while being willing to own at $12.60. RIVN at $14.69 means the market is pricing it between your strike and current price. If it settles here or drifts up, you collect full premium. If it drifts down, you still have 11.5% cushion.
Key Metrics to Track
| Metric | Formula | Target |
|---|---|---|
| Premium / Capital | Premium / Strike | >1.5% monthly |
| Annualized return | (Premium / Capital) × (365 / DTE) | >15% |
| Distance OTM | (Strike - Price) / Price | >10% |
| Delta | From options chain | 0.25-0.35 |
Questions for You
- Which expiration will you pick? (I recommend 30-45 DTE for first trade)
- How many contracts? (Start with 1 = $1,300 capital at risk)
- What's your real breakeven emotion? If RIVN drops to $13.50 and you're sitting on an unrealized "loss," do you still feel good about the position?
Log your answers. We'll review at week's end.