Buffett-Style Options: Our Puts Got Assigned on Amazon — Here’s Exactly What We Did Next

During their recent episode of the Value Options Letter and Acquirers Podcast, Travis and Tobias discussed:

• Our Puts Got Assigned On Amazon — Here’s Exactly What We Did Next
• The Two Outcomes Every Put Seller Must Understand
• Why Getting Assigned Isn’t A Bad Thing
• How We Generated Returns Of Up To 80% Annualized
• The Wheel Strategy: Turning Assignment Into More Income
• Amazon Got Put To Us At $250 — Now What?

TRANSCRIPT

[Tobias] Hi, I’m Tobias Carlisle. This is the Value Options Letter podcast. I’m joined as always by my co-host, Tim Travis.

How are you, Tim?

[Tim] I’m doing great, Toby. How are you?

[Tobias] Great. I’m excited. Today, we’re going to cover the trades that have closed since we launched the service.

And we’re going to go through the various outcomes that people can expect and how the system handled it and what it looks like. So take it away.

[Tim] Absolutely. So it’s a short sample. I mean, I think we launched 45, 50 days ago, something like that.

And we’re really thankful for all the support that we’ve gotten. But one of the things that Toby and I are big on is transparency and showing the trades, the results of them. And there’s going to be trades that go bad.

There’s going to be trades that go good. But we’ll continue to walk you through the process on how to manage those and get going. So let’s go ahead.

So what we do. So just a basic overlay. So we sell options on good businesses that we’d be happy to own and get paid to wait on.

So the main strategies that we use are cash-secured puts, covered calls, and then the wheel strategy. So on a cash-secured put, we’re going to pick a price below today’s price that the stock’s available at. We could do it at the money.

We could even sell puts in the money. But generally, they’re below the price that they’re currently trading at. And we only do it on stocks that we’d want to own at a price we’d want to own it at.

And when we sell that put, we collect cash premium upfront. So that’s what’s in it for us. We collect the premium upfront.

And we’re just saying, hey, we’re willing to buy this stock at that price. There’s two honest outcomes. So heads or tails.

Heads, if the stock expires above the strike price that we sold the put at, we keep the premium. And that’s it. We target double-digit returns.

And that’s all she wrote. If the stock is below the strike price at expiration, then we’re going to end up owning the stock and having the upside or downside associated with that from there. That also includes dividends.

And then also it opens up to be the wheel. So if we’re assigned that put, we end up owning the shares. And then we can start selling covered calls against them.

So that’s collecting more premium. It’s lowering our cost basis until the shares are eventually called away at a gain. So the premium is a primary function.

Valuation is the essential function. And every trade comes with the full thesis, walking our subscribers through why we’re doing it and what we’re doing.

The Two Outcomes Every Put Seller Must Understand

[Tobias] So Tim, just let me summarise very quickly. For every position, there’s always two outcomes. One is that you end up owning the stock.

And the other is that the option expires in the money and you collect the premium. In both instances, we want to make sure that we’re happy with that outcome. And if we’re assigned the stock, we’re always trying to buy, set a strike below where the stock is currently trading.

So the expectation is that the option would typically expire without the stock being assigned. But if we are in fact assigned, that creates another opportunity for further put selling or further call selling around the stock that we’ve received.

[Tim] Right. So the way to think about it is when we’re selling puts and we’re actually exercised, what we’re doing essentially is manufacturing a cheaper entry price into the stock. And you’ll see in one of the examples that we’re going to give towards the end of this presentation today, you’ll see how powerful that is because often you’ll miss the biggest part of the downturn in the stock.

And so we’ll get into that. So let’s keep going. But good question there.

So I got into this. I’ll just be quick. How a cash recur put works.

If we sell a put on a stock and the stock stays above our strike price at expiration, the put expires worthless and we keep 100 percent of the premium, then we can do that again. Repeat the process. Right.

Outcome two, we’re assigned the stock dips below our strike. We end up owning 100 shares per contract at that strike at a price we already decided we like the stock at. And then the premium lowers our costs further.

OK. And that’s when the wheel begins. And so you’ll see how we’re doing that with Amazon later in this presentation.

So we’ve had a variety of positions close as of today. So today’s a holiday. It’s June 19th.

That’s Toby and I are recording this today. So we’ve had we sold a put on Berkshire Hathaway. We sold a put on Brookfield Asset Management.

We sold a put on Workday. We sold a put on Aries, Uber, Owl, Dollar General, Workday and Camden Properties. And all of those trades have either expired early, I mean, expired worthless, excuse me, or we closed early at our target price, which we’ll do sometimes to free up capital or to attain a higher annualised return and just take risk off the table.

So seven of those, the first seven I named, they expired worthless. We took them to expiration on the site, on Workday and Camden Properties. We made most of the money in a pretty short amount of time and we were able to close them early.

So we’ll get into those specifics now. So Berkshire Hathaway, this trade was sold on April 27th, 2026. So we sold the $450 put and we collected $3.05 a share, 32 days to expiration. So this expired in May. And we had to set aside $44,695 for that trade because it’s cash secured, right? We have to assume we’re going to end up owning the stock.

And so that cash is in reserve. The stock stayed above 450. And this is the only one that’s below our 10% threshold.

We collected 7.8% annualised. Toby, we’ve talked about in the past on a stock like a Berkshire Hathaway where the financial strength, the resources are so good, the management’s so good. Sometimes the put premiums aren’t going to be that high, but it’s a great, I mean, if you can make 7.8% with what you believe to be a very low risk profile, it made sense. So sometimes we’ll bend the rules on that high of a quality stock, but that’s a good example of an expired put.

[Tobias] And in a trade like this, if the stock is put to you, then you’re very happy with that outcome too.

[Tim] Yeah, very happy. And then you start the wheel. And some people would call it a gripe on Berkshire Hathaway is that it doesn’t pay a dividend.

And so what’s cool about when you are actually exercised and you start the wheel process and you start selling calls, you’re kind of manufacturing a dividend into your shares. So we like that. You’re going to see a lot of Berkshire on the value options later over time.

Next one, Brookfield Asset Management. On April 29th, we sold the 42.50 put. We collected a dollar premium per share, 50 days to expiration.

The cash required was $4,150. Brookfield held solidly above 42.50. The put expired worthless. We kept the whole premium.

That’s 17.6% annualised returns. And I will mention too that the subscription of the value options letter right now is only $99 a month. So you can see that the idea is for the subscription to pay for itself very easily, that God willing, that’s the plan.

That price will go up towards the end of the summer. It will double. But these people that are subscribing now showing support to us, it’s grandfathered in.

So your rate’s never going to go up, which is hugely beneficial. So another successful trade. Let’s go to the next one.

Workday. So Workday is part of this software as a service narrative where they have a phenomenal business picking up market share. And the stock was a glamour stock for a very long period of time.

But it’s crashed down with all the fears about AI eating software’s lunch. On May 4th, we sold the 110 put. The stock was at 126.86 at the time. We collected a very solid return of $5.05 a share, 45 days to expiration on this trade. The cash requirement was $10,495. Workday expired above 110.

It really was a solid trade. It didn’t really come under too much pressure. The put expired worthless.

We kept the full premium. That’s 39% annualised right there. And this software narrative is giving us a lot of opportunities because a lot of these companies have good balance sheets.

They have good cash flows. Yes, they’re stock based compensation that kind of obscures some of the financial realities a little bit. But as you can see, 39% annualised on what we believe to be quite a good trade.

Next one, Aries Management. So this is a phenomenal alternative asset manager, great growth track record. They’ve been growing earnings, growing revenues.

They pay a nice dividend. They’ve been caught up in kind of the fears about private credit, an area that we’ve done a lot of research into and feel pretty comfortable with, depending on the management team and the structure. This is the actual asset manager.

So they’re not really taking the credit risk that’s actually in the underlying funds. But so on May 4th, we sold the $100 put when the stock was at 119.29. We collected $2.15 a share, 45 days out. And so the cash set aside was $9,785.

Why Getting Assigned Isn’t A Bad Thing

Once again, Aries held above 100, put expired worthless, kept the full premium, $215 profit, 17.8% annualised. And I mean, I would have been happy to own this. It’s funny, Toby, because people think that the only outcome you want is you’re put to expire worthless and you keep the full target profit.

But in the history of me doing this, which is about 20 years now, a lot of the biggest winners come when you actually get exercised and you ride the stock higher and do the wheel process too. So this is another good example that it happened like that, where it expired worthless, but we would have been fine either way in our estimation.

[Tobias] I mean, that’s one of the things I like most about it, that you can pick your entry price. And if you can get a little bit of a discount on just about every entry price, then that’s a great outcome. And as long as you’re getting compensated for the risk you’re taking in the put, then there’s two great outcomes.

[Tim] Agreed, agreed. And here’s another one, Uber. Bill Ackman’s been very vocal, pushing Uber and Meta and Amazon and Google and Microsoft.

And Uber is a stock that has really grown. They’re starting to really generate attractive cash flows. I think they’re well suited for the AI space.

And the stock’s fairly cheap relative to our estimate of intrinsic value. So on May 6th, we sold the $70 put. The stock was at 77.85. We collected $2.86 a share, 43 days out. Cash requirement was 6,714. Once again, Uber stayed above 70. The put expired worthless and we kept the full premium.

That’s 36.2% annualised. And what’s great is this allows you to keep doing it again. Uber’s still around a similar price.

I think last I looked at it was around 74, something like that. So we can keep doing it as long as we’re still comfortable with the fundamentals. You get a lot of cracks at it.

Whereas if you just own the stock outright, yeah, you have more upside potential if that stock doubles or something like that. But you have to get the timing right. You have to play the waiting game.

This adds an element of timing, which I think can be attractive, at least for a portion of your portfolio. Luau Capital, you’re going to see this name again. So another alternative asset manager.

Once again, they’re not taking the real credit risk. The credit risk is in the underlying funds. And truthfully, I feel fine about the credit risk picture overall.

I mean, credit automatically, you’re taking some risk. I think it’s an overblown narrative from my research on it. But so on May 12th, we sold the $9 put.

The stock was at $9.84. We collected $0.33 a share. 37 days out, the trade tied up $867. Luau held above nine.

The put expired worthless. We kept the whole premium. $33, which is 37.6% annualised. So another successful trade, fantastic annualised return. Luau, I mean, if we were exercised at that price, the dividend would have been darn near close to 10%. So once again, heads, you win.

Tails, you feel comfortable. If Luau goes to five, it would be a losing trade, of course. But that’s always the risk we’re taking in investing.

[Tobias] That’s the risk of the put option seller, that you have the same downside risk as the owner of the equities, which is why it’s important to think about it as the owner of the equity.

[Tim] Agreed, agreed. But what’s cool is that you’re building a cushion. That’s one thing I like thinking about.

It’s like that cushion element of it. So it’s like a bear market’s defined by 20% down. If we can protect 15% of that risk and you’re only down five, that’s huge.

[Tobias] So here’s another one.

[Tim] This is the type of opportunistic stuff you get with the value options letter, because we study these companies. And so we have a big Rolodex, a big watch list of companies that we’re watching. And then you get some news event or some stock action, which creates volatility.

Maybe it’s around earnings. And you get these really attractive price propositions like this one. So on May 27th, Dollar General was trading at $104.83. And so we sold the $90 put. We collected $1.10. This put was only nine days out. So that’s pretty big. First of all, we think Dollar General’s undervalued.

But secondly, the $90 put is a big cushion from $104.83 where it was at. The trade ties up $8,890. Dollar General stayed comfortably above $90.

And we made $110, which is 50.2% annualised. So the actual dollar amounts on these might not seem huge, but you can always position size your portfolio accordingly. This is not a site where we’re acting as fiduciaries or investment advisors.

This is a newsletter publication. So you’re the captain of your own ship, or you might consult with your own advisor. But a really attractive rate of return.

This was a risk that we were very comfortable taking on a beaten down staple retailer, the type of company that doesn’t get killed just because oil prices are up. They’re a lower cost option than a lot of their peers. So let’s go to the next one.

How We Generated Returns Of Up To 80% Annualized

So closed early. So those were all the ones that expired worthless. These were the ones that closed early.

So another benefit for subscribers is that if it makes sense to get out of the position, an alert will go out and it’ll be notified. The reason why you would do this is A, take risk off the table. B, maybe the trade’s made most of its money in a shorter amount of time.

And so your annualised rate of return is substantially higher. And C, it’s to free up capital. So we are capital constrained, all of us.

And you can’t set every single trade. And so it’s a way to recycle capital. You take your profit and then use that freed up money to set new trades.

So May 16th on Workday. So another one with Workday. We talked about that before.

We sold the $110 put. The stock was at $124.75. We collected $4.70 per share on this one. So this one had 33 days to expiration.

The cash requirement was $10,530. And Workday rallied very aggressively to about $146. And we were able to buy back the put at $0.15. So we made 97% of the profit and there were still 15 days left on the trade. So that’s an 80.6% annualised return. Nice work. Yeah.

So it’s an attractive way to do things. And since you still have $10,530 tied up, why not take profits there? And looking back now, Workday has come down a bit.

A lot of these stocks have come back down. So it’s still above $110. But taking profits is not something to sneeze at, particularly when it’s options and you want to free up the capital and that sort of thing.

Here’s the last one that we exited early. This is Camden Property Trust. They’re a big apartment REIT.

I really like the apartment REIT industry right now. I think that the disparity between renting and owning a home is really, really high. And I think renting is very attractive.

Now there was excess supply in the Sunbelt and Camden’s definitely been hit by that, just like all of its peers in the Sunbelt, in that rental prices have not increased at the rate that they were increasing. But that supply is getting worked through and there still obviously is growth in those regions. So on May 18th, we sold the $95 put.

The stock was trading at $103.93. We collected $1.68 a share, 60 days to expiration. Cash required was $9,332. And so what happened was Camden had a nice little rally and we were able to buy back the put for 50 cents, which was 70% of the profit.

It was a 27.2% annualised return. And then we freed up almost 10 grand just to be able to set a new trade. So once again, that’s one of the benefits.

When you start trading options on your own and you don’t have help, sometimes it can be hard to manage them and keep track of them. And that’s one of the big benefits of the value options letter. Let’s work.

The Wheel Strategy: Turning Assignment Into More Income

Thank you. Yes. And so now let’s talk about the wheel.

So this is what happens when you actually get assigned. So we sell the cash-to-care put. If you get assigned, the stock dips below the strike price at expiration.

We now own 100 shares at a discount. The premium reduces our cost. And now we’re going to sell covered calls.

We’re going to write calls against the shares for more premium. Each one lowers our effective cost basis. And then if we’re called away, we can repeat the process again.

Now you don’t have to do the wheel. If you think a stock’s going to double and you sell a put, you get exercise. It’s perfectly rational to just own the stock outright.

That’s fine too. And we do do that at times too. But this is an example where we’re going to utilise the wheel.

So let’s go ahead. So Amazon. First of all, I love Amazon.

I think Amazon is as well situated as any company in the world. I think that the AWS is just a monster. I think that their new logistics business is phenomenal.

Their chips businesses are underappreciated. Their advertising business is underappreciated. And when you look at the valuation compared to some of the other names out there, I like it.

But I understand it’s had a big run. So I was trading at like 200 earlier in the year and it ran up. But it still can offer very good value in our estimation.

So on May 14th, we sold the $250 put. The stock was at 270. So here you go.

The stock’s at 270. Let’s say you like it, but it’s had a huge run. You know how it is.

It’s tough. It’s frustrating. It’s hard buying it after it’s had such a big run.

Amazon Got Put To Us At $250 — Now What?

Whereas if you sell the 250 put, if it stays and keeps going up, you still make money. But if it drops, you didn’t buy it near the high, which is attractive. So we collected $3.08, 35 days to expiration. The cash set aside was $24,692. So what ended up happening? Amazon sold off a little bit.

So it closed just under 250. It’s at like 244-ish right now. And so the put was a sign.

And so we ended up buying 100 shares at 250. But with the premium that we collected on the put, it cuts the effective cost basis to 246.92. So that’s the first and second part of the wheel. So now we go to number three.

Got ahead of myself there. Okay. So this is a trade that was issued to subscribers today on June 19th, and it is for the June 22nd trading day.

We’re going to sell the 260 call against the 100 shares that have been put. We’re targeting a premium collection of $6.75 a share, which is kind of the middle of the trading range for this option. There’s 39 days to expiration, expires July 31st.

So here’s where the trade would stand, assuming we get filled at that price. So two option trades in this wheel, the assigned 250 put where we collected 308, and this new 260 call would be 675. So that’s a total premium collection of $9.83. And that would lower the cost basis to 240.17. And currently the shares are at 244. So it’s really just the start of the game. And if that option expires worthless, the 260 expires worthless in 31 days, we can still another call, or we could just own the stock outright. But you’re not just taking a loss.

It’s not just a binary A or B outcome. It’s a continued process with the wheel, and we feel really good about it. So does that make sense, Toby?

[Tobias] 100%. You find the stock that you like and you structure around it so that you get the price that you want. You’re always lowering your price if it’s going against you until you make a decision you wanted at the price that you get it, or you’re happy with the income that you’ve generated and you move on.

Great outcomes.

[Tim] Right. And so one more trade. Thanks for sticking with us.

We want to give you guys the complete synopsis here. So Blue Owl, we talked about this one earlier. We had a put expire worthless before.

We had another trade where we did a covered call. So we bought 100 shares at 1027. This was on May 5th.

We sold the $11 call for 35 cents a share. And that call expired worthless. So we banked $35 on June 18th.

And the trade that went out to subscribers today is we sold the next $11 call, which expires in 60 days for 40 cents a share. And so the two covered calls that we’ll have sold on these Blue Owl shares will have collected 75 cents of premium. And that’s why it lowers the cost basis from 1027 to an effective basis of 952.

Right now the shares are at 953. So even though the stock’s gone down by us using these strategies, we’ve reduced our cost basis to a level where we’re basically break even and Blue Owl pays like a 9% dividend. So that dividend, I believe there is a payment that comes in within this next option price.

I don’t think there was one on the first option. I think it’s about to go out pretty soon. So that’ll actually reduce our cost basis further.

And once again, if that option expires, if our next $11 call expires worthless, then we can do the process again. I do think Blue Owl is really undervalued long term. And so I do think it’ll rallies far beyond 11.

But you don’t have to do this on every share that you own. So if you own a thousand shares of Blue Owl and you want to reduce your risk and hedge a little bit, maybe you do this on 500 of the shares. But another very effective tool.

And so that’s where we’re at. So I feel really good about our first whatever it is, 45, 50 days. We’ll have to know when the actual birthday of Ball is at some point, Toby.

But none of these trades do I feel like we’re in bad shape on. I feel very confident in all of them. Obviously, many of them have expired worthless and done really well.

We’ve got some really good trades that have been coming out lately that are working and will be closed in the not too long future. And look, what’s great about the value options letter is opportunities come about all of the time. There’s a large IT company that had a bad guidance and kind of not a great earnings report.

And the stock created 18 percent to prices and valuations that I’ve never seen it at. And that’s another new trade that we’ve listed that is available for subscribers. And so I encourage you to take advantage of that if you’re listening to this and you haven’t subscribed yet.

We mentioned it earlier, Toby. Right now, it’s ninety nine bucks a month or for the year, it’s nine hundred ninety nine dollars. So that’s a nice discount.

But towards the end of the summer, that price automatically is going to two hundred. But if you subscribe before then, you’re locked in your grandfather in that lower rate. And the feedback’s been really good.

I don’t know what you’ve been hearing on your end, Toby, but but the feedback’s been really good. People are learning. I had a great email.

I had I had a gentleman tell me that he got this to help educate his son on investing and how options can be used. And so they were really excited to get the book. We’re mailing the book out to to all the subscribers, all paying subscribers.

So very encouraging. First, a couple of with it. We’re very thankful for all the support we’ve gotten.

[Tobias] Yeah, I love that idea. I’ve had the same thought. I would love to take my kids through this process because I think it makes so much sense, teaches them so much about valuation, teaches them so much about thinking about internal rates of return and risk.

It’s a it’s a really wonderful service. I’m very proud of it.

[Tim] I love that, Toby. That’s fantastic. And we’re going to look, we’re going to have losers.

This is not going to be a perfect track record site. We fully expect to have losers over time. There’s going to be times when we should have just ended up owning the stock outright.

We’re going to be wrong in our analysis at times. But that’s part of investing. And and it’s a business like intelligent approach to investing.

You know, obviously, we’re not acting as investment advisors in this capacity, but I’m glad that people are getting value from it. So take advantage of that trial. And thank you.

[Tobias] Thanks, folks. Tim, just give us the link if folks want to know that.

[Tim] So valueoptionsletter.com and then forward slash trial. Then if they do that, then they can get they can get that trial and get started there. And yeah, we’re looking forward to having you join us.

[Tobias] Great stuff. Until next time. Thanks very much.