How To Create a 27% Margin of Safety Using Options
Thursday, September 24, 2026 · Johnny Hopkins
During their recent episode of the Value Options Letter and Acquirers Podcast, Travis and Carlisle discussed How To Create a 27% Margin of Safety Using Options. Here’s an excerpt from the episode:
And I think the value options letter came at a good time, because that’s really when the SAAS apocalypse was at its full force. And so ServiceNow on July 23rd, the stock was at 185. And so what we did was we sold a $74 put 27% below where the stock was trading at, and we collected $4 a share.
So our target profit was 5.7% on capital. Once again, just under 12%. These trades are pretty similar in how they were constructed.
The stock rallied to about 138. And we were able to close out the trade after just holding it for 55 days. And we made $346 of the $400 target profit.
Want to see the actual cash-secured put and covered call trades Tobias Carlisle and Tim Travis send subscribers each week?
Value Options Letter combines value investing with conservative Buffett-style options strategies, including cash-secured puts, covered calls and disciplined “get paid to wait” opportunities on undervalued businesses.
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