Two Defensive 5-Day Cash-Secured Put Trades Start-to-Finish: Laddering Strikes – January 31, 2026
I favor cash-secured put trades in volatile, bearish and volatile market conditions. I also use puts to enter covered call trades (PCP, Put-Call-Put or “wheel” strategy). In this article, real-life examples with Celestica Inc. (NYSE: CLS) will be analyzed to demonstrate how to enter such trades with initial and final calculations.
Real-life example 5-day trades with CLS from 9/8/2025 – 9/12/2025
- 9/8/2025: CLS trading at $250.77
- 9/8/2025: The 9/12/2025 $225.00 put strike had a bid price of $0.90
- 9/8/2025: The 9/12/2025 $230.00 put strike had a bid price of $1.37
- 9/12/2025: At contract expiration, CLS closed at $241.77, down substantially from the price at trade entry but well above both OTM put strikes
CLS 3-month comparison price chart with the S&P 500 at trade entry
Initial & final trade calculations (both strikes expired OTM and worthless): Trade Management Calculator
- OTM $225.00 put: $90.00 time-value premium (1 contract)
–0.40%, 29.32% annualized
–Protection to BE ($224.10): 10.64%
- OTM $230.00 put: $137.00 time-value premium (1 contract)
–0.60%, 43.74% annualized
–Protection to BE ($228.63): 8.83%
- Total time-value premium collected for 2, 5-day contracts: $227.00
5-day initial & final returns
- 0.50% (max return) annualized = 52% annualized
Discussion
- Significant returns can be generated with 5-day defensive cash-secured put trade
- Option trades can be crafted to align with all market environments and personal risk tolerance
- In the case of CLS, significant initial 5-day returns were captured and realized
- These are low-risk, not no-risk trades
- I refer to the process of using multiple strikes with the same underlying security and expiration date as laddering strikes
Author: Alan Ellman