My $10,000 Monthly Income Plan: Bull Put and Bear Call Spreads, Trade by Trade

If I had $10,000 sitting in a brokerage account and my only goal was monthly income, I wouldn’t buy a dividend stock and I wouldn’t day trade. I’d build a small options portfolio spread across a handful of trades, each one with defined, capped risk from the moment I open it.

In this article I walk through that plan with real numbers on real stocks, from the scanner filters I use to the trades they returned. I use two strategies that work in opposite conditions: the bull put spread for a market that’s rising or moving sideways, and the bear call spread for one that’s rolling over. I ran the scans in Option Samurai, which sponsored a portion of the video. The full disclosure is at the bottom of this page.

The plan at a glance

Markets don’t move in a straight line, so my approach shouldn’t either. Together, these two strategies let me collect premium whichever way things are leaning, while my risk stays defined and my capital works across several trades instead of one big bet. Every figure in this article comes from the scan as I ran it, so treat it as a snapshot of that day, not a live trade list.

The target: 2% to 2.5% a month

Before I show you the scan, I want to set a realistic target. I’m not chasing a blow-up-your-account number. I’m looking for somewhere around 2% to 2.5% a month. That might not sound exciting, but compounded it comes to roughly 27% to 34% a year, and it’s a number you can actually hit consistently without reaching for garbage stocks or stupid-high deltas just to juice the premium.

Strategy 1: The bull put spread

The bull put spread is my favorite trade for capital efficiency. It’s the defined-risk cousin of the short put. I sell a put at one strike and buy another put at a lower strike, on the same stock with the same expiration date. That long put is what caps my maximum loss.

Because my risk is capped, my broker doesn’t need to lock up nearly as much buying power per trade. Less capital tied up per trade means I can spread the $10,000 across more positions instead of betting it all on one stock. It’s also my favorite because, over the long run, the market tends to go up, so in typical conditions there are plenty of bull put trades to find.

How I set up the bull put scan

Here is every setting I used. The bear call column is for the second scan further down.

The scanner settings I used for each strategy. Only the stock scores and moneyness change between the two scans.

Stock scores. Option Samurai scores every stock from 0 to 10 on three scales. Fundamental looks at the actual business: earnings, valuation and that kind of thing. Growth looks at where revenue and earnings are heading. Technical measures price action and momentum, so I’m not selling puts into a stock that’s actively falling out of bed. I set all three above 5, which filters out the shaky companies before I even get to the options data. I don’t want to be holding a spread on a stock that’s already in trouble if the trade goes against me.

Liquidity. Total option volume above 5,000 is a liquidity check. More liquid options generally have tighter bid-ask spreads, which makes it easier to get in and out. I also keep the bid-ask spread below 25 cents to help avoid slippage.

IV Rank above 20. IV Rank tells you where a stock’s current implied volatility sits compared with its own past year, on a scale of 0 to 100. It’s less about how volatile the stock is and more about whether volatility is high or low for that stock right now. I don’t need it sky-high for a bull put, since the spread already keeps my risk contained, but I still want some volatility priced in so the premium is actually worth collecting.

Strikes and timing. Moneyness from −25 to 0 means I’m only looking at out-of-the-money puts, so the stock has to fall before these even become a problem. Days to expiration of 30 to 45 is my usual sweet spot, balancing premium against how long I have to sit in the trade.

Spread-specific filters. Probability of max profit above 70 is roughly the odds that the trade reaches its maximum profit if I hold it to expiration. Probability of max loss is the estimated probability of the strategy expiring at its maximum loss, and I cap it at 20 because I want that number low. The rest (spread expected value, spread profit ratio, max profit and max loss) I leave at their defaults.

This cycle’s five bull put trades

I ran the scan and sorted the results by probability of max profit, highest to lowest. I took the top five. Setting the filters once and letting Option Samurai do the scanning is how I found these five trades in under a minute.

The five bull put spreads the scan returned, with their combined credit and maximum risk.

Google sits at the top with an 83% chance of hitting max profit, and its fundamental score alone was a 9. Amazon is right behind it with slightly better risk: a similar structure and an 82% probability. Netflix has the smallest maximum loss of the batch at $231.50. Chipotle and Super Micro round out the list, with probabilities of 76% and 75%.

Add the five up and I’m looking at $352.50 in total credit against roughly $1,547.50 in total risk. Call it a 4.4-to-1 risk-to-reward ratio for the batch. A higher maximum loss than maximum profit is common with bull puts. More importantly, that $352.50 is roughly a 3.5% return on $10,000, which is already above my 2.5% target.

That’s why I chose these trades. Not only do they have the highest probabilities of max profit, they also give me enough headroom to close early if I want to.

My rule: I don’t wait for the last 20%

Most traders make the mistake of holding these trades all the way to expiration, trying to squeeze out every last dollar. That last 20% isn’t worth the risk you carry to get it. So the rule I follow is simple: once a trade reaches somewhere between 50% and 80% of its max profit, I consider closing it.

On this batch, that means I’m not waiting around for the full $352.50. I’m targeting $282, which is 80% of the total credit and around a 2.8% return on my $10,000. The second the combined position hits that number, I’m out. It doesn’t matter whether there are two weeks left or twenty-seven days.

You might ask why I’d leave money on the table. Chasing that last 20% means holding closer to expiration, when gamma risk can rise sharply, particularly if the options move near the money. On top of that, any American-style equity option can be assigned early. I’d rather bank 80% of the reward early than hold out for the last 20% and expose myself to a price swing I can’t control.

Strategy 2: The bear call spread

But what if the market is down and going lower? That’s when I reach for the bear call spread. It’s the strategy for when I think a stock is more likely to fall or stay flat than run higher. It’s the same idea as the bull put, just mirrored: I sell a call at one strike and buy another call at a higher strike, with the same expiration. The long call caps my max loss the same way the long put does on the bull put side.

Most of the filters carry over, but two flip along with the strategy. First, the stock scores. Instead of setting Fundamental, Growth and Technical above 5, I set all three at 7 or below. I’m not looking for the best companies out there anymore. I’m looking for ones that are a little weaker and a little more likely to stall out or drift lower. Second, moneyness flips from −25 to 0 to 0 to 25, because now I want out-of-the-money calls above the stock price. Everything else stays the same as the bull put setup.

I ran the scan, and this time it returned a single result: Spotify. Sell the 560 call and buy the 565 call, expiring October 30, 37 days out. It has an 83% chance of hitting max profit, worth $172.50, against a max loss of $327.50.

One trade, compared with that whole list on the bull put side, says something. Right now most stocks are trending up, so there are simply fewer setups for a bearish trade. That’s why I run both scans. Markets tend to go up over longer periods, but zoom in on a chart and you’ll see volatility along the way, and that can create bearish trades. In options trading, going with the market’s flow is typically a good idea.

The risks to understand before you copy any of this

Earnings. Google, Amazon, Netflix, Chipotle and Spotify all have earnings reports landing before their October expirations. Option Samurai flags that with a red telephone icon beside the ticker symbol. Super Micro is the only company that doesn’t report earnings before its contract expires. If you’re not comfortable holding through a report, that’s all the more reason to close the trade beforehand, or skip it entirely. It’s up to you.

Today’s numbers are not a monthly guarantee. This cycle, the scan handed me five clean bull put candidates, all at 75% or higher probability of max profit, adding up to roughly 3.5%. But it gave me only one bear call trade. These results won’t look the same every month. Some months, especially when volatility is low or the market is grinding sideways, you might find only one or two trades worth your time. Some months you might come up empty, and that’s okay. The moment you start forcing a trade just to hit a target, you’re taking on the risk the filters were supposed to screen out.

Risk-defined is not risk-free. An 83% probability of max profit does not mean there’s only a 17% chance of losing money, because the remaining outcomes can include partial profits as well as losses. And when a trade does go against you, the potential loss can be much larger than the credit you collected.

Whatever you decide to trade, track it. I use the trade log in Option Samurai, where I enter the position details and it tracks the trade for me.

Final thoughts

Let’s bring this back to where I started. If I had $10,000 and my only goal was monthly income, this is exactly how I’d build it. Not one big bet on one stock, but a handful of small, defined-risk trades across names that passed real filters, including fundamentals, liquidity, volatility and probability. Five bull puts were worth roughly 3.5% for the month, and one bear call added a little more. Even then, I’m not planning to hold every trade to expiration. The moment the combined position hits 80% of its max profit, I close it and move on to the next scan.

That’s the whole game. After every trade cycle I run the same disciplined scan, take what the market gives me, and bank it before greed talks me into holding too long.

Is 2% to 2.5% a month possible every single month? No. Some months you’ll clear it easily, and some months you’ll come up short or come up empty. But run this process consistently, and over a year it can add up to something a lot more interesting than 3% in a savings account.