Ep. 22 — FUNDAMENTAL FRIDAYS #ORCL After Earnings

Brian Overby opens this Fundamental Friday the day after Oracle’s earnings report, and the stock is down on the news. Rather than treat the dip as a problem, he treats it as the setup for the week’s trade: a cash secured put in Oracle. The premise is simple and repeatable. If you’d be happy owning the stock at a lower price anyway, get paid to wait for that price to show up.

Before touching the trade, he recaps last week’s positions in Apple and Netflix, both part of an ongoing wheel strategy: sell a put, get assigned the stock if the price falls that far, then sell calls against the shares until they get called away, then start over. It’s a small piece of housekeeping, but it matters, because it frames the Oracle trade that follows as one more link in the same chain rather than a one-off bet.

With Oracle trading near $153, Overby goes out 35 days to the October 16th expiration and targets the 150 strike put, aiming for the four to five percent premium he treats as his standard for this strategy. He walks through the math out loud: a $7.60 credit on a $15,000 obligation (150 strike times 100 shares) works out to almost exactly 5%, which checks the box. He’s careful to distinguish this from a naked put. Because the trade is cash secured, meaning he actually has the capital on hand to buy the stock if assigned, there’s nothing speculative about it in his mind, even though the profit and loss graph shows the same substantial downside as owning the stock outright.

The most useful stretch of the episode is a short digression on how to think about options as insurance rather than as pure speculation. He compares it to why a Bentley costs more to insure than a Ford Taurus: the premium simply reflects the price of what’s being protected. Applied to puts, that reframes the whole cash-secured-put trade as getting paid to underwrite the risk that a stock you already like drops in price, which is a very different mental model than trying to guess which way a stock moves next.

He also touches on why some underlyings work better for this strategy than others. Netflix, in his telling, has decent volatility but has been “stuck in the mud,” so the premiums haven’t been as attractive lately compared to Apple or Oracle, both higher-priced names that carry richer premiums simply because there’s more dollar value to insure. That’s a small but practical filter for anyone screening their own wheel candidates.

The order itself goes in as a limit at $7.80, ticks up slightly as he’s talking (a running joke on the show that the market seems to move against him the moment he mentions a price), and fills without needing an adjustment. Overby closes by running the annualized math: five percent every 30 to 35 days, if it repeated monthly, would work out to roughly 60% a year, though he’s quick to caveat that no single trade is a guarantee of that pace holding up.

It’s a short, low-drama episode, which is really the point. Fundamental Fridays leans on a handful of repeatable, rules-based option-selling structures rather than one-off predictions, and this episode is a clean, almost textbook example of the wheel in its opening stage: sell the put, wait, and let the plan run.