Rise’s 5 Golden Rules for Selling Options (Without Losing Your Mind)

When it comes to selling options, consistency beats gambling. After years of trial, error, and watching traders blow up their accounts, I’ve narrowed it down to 5 Golden Rules that will keep you in the game and growing.If you’re learning The Wheel strategy or looking for practical tips to make smarter trades, these are the principles that have kept me sane AND profitable.

1. Sell Options on Stocks You’re Happy to Own

Here’s the deal: if you wheel stocks you don’t even want, you’ll end up bag-holding. And that hurts. But if it’s a stock you actually like, it’s a different story. Stocks go down sometimes, it’s inevitable. The mental game is way easier if you actually want the company in your portfolio. Don’t chase high premiums like a sailor chasing sirens at sea. Stick to stocks you’d gladly hold if assigned. That way, even when things dip, you’re not stuck with a bag—you’re building a portfolio you believe in.

2. Never Panic (Especially During After-Hours Trading)

Panic leads to FOMO buying or blind selling, both of which kill accounts. If you miss the bus, don’t run into the street and get flattened. Another bus will come. Most panic events happen around earnings. And here’s the truth: once the event has passed, there’s not much you can do at that moment. Instead of panic, make a plan. Unless you’re holding Enron (RIP), time - theta decay - is on your side. Use it.

3. Stocks Don’t Only Go Up (or Only Go Down). Have Patience.

When a position goes against you, ask: Is this permanent? If not, breathe.Executives are paid to drive shareholder value (and they’re often shareholders themselves). Over time, emotion-driven moves in the market give way to math. Stocks revert to the mean once the emotional dust settles. Don’t be part of that emotional dust. Otherwise, your money might literally become dust in the wind.

4. Don’t Overextend: Stick to 10% Max Trade, 20% Max Position

This one rule can save your portfolio. If you load half your account into cash-secured puts (CSPs) and get crushed, what’s left? Nothing. But if you keep trades at 10% max size and positions at 20% max, you leave yourself room. Room to average down, sell more CSPs, or buy shares without blowing up your account. You don’t have to enter with full size at once. Scale in. Spread across strikes or expirations. And yes, it’s perfectly fine to have shares that aren’t covered.

5. Always Take Profit

Options traders get greedy. Don’t.If you’re up 50% before half the contract’s time has passed - take the win. Move on.Especially with longer-dated options (30–45 DTE), sitting around waiting is just wasted opportunity. Free up your capital and redeploy it. Closing winners early accelerates returns and avoids random events tanking your position. Remember: you’ll never go broke locking in profits.

Final Thoughts on Rise's 5 Golden Rules for Selling Options

Trading options isn’t about hitting one big win, it’s about compounding steady gains without blowing up. Follow these 5 Golden Rules for Selling Options, and you’ll be playing the long game instead of gambling. And if you want to dive deeper, I made a video on the biggest mistakes people make when selling options - check it out here.

FAQ: Selling Options and The Wheel Strategy

What is The Wheel strategy?

The Wheel strategy is an options trading approach where you sell cash-secured puts (CSPs) to acquire stocks at a discount, and then sell covered calls on those shares to generate consistent income. It’s designed for steady returns, not quick gambles.

How much money do I need to start selling options?

To sell cash-secured puts, you’ll need enough capital to buy 100 shares of the stock you’re targeting. For example, if a stock trades at $30, you’ll need at least $3,000 in your account. Covered calls require you to already own 100 shares of the stock.

Why should I only sell options on stocks I like?

Because if you get assigned shares, you’ll be holding that company in your portfolio. If you don’t believe in the business long-term, bag-holding becomes stressful and risky. Selling options on companies you like ensures that even when prices dip, you’re comfortable owning the stock.

When should I take profit on an options trade?

A common rule of thumb is to close your position if you’ve reached 50% of the profit before 50% of the time to expiration has passed. This frees up capital and lowers your risk of unexpected events wiping out gains.

What’s the biggest mistake beginners make when selling options?

The biggest mistakes are overextending (putting too much money in one trade), panic selling, and chasing high premiums on junk stocks. These usually lead to blown-up accounts. Stick to your rules, manage risk, and stay patient.