# The Best Options Income Strategies for Beginners
Source: https://theoptionsbench.com/guides/best-options-income-strategies-for-beginners/
> Plain-text mirror for AI/LLM ingestion. Canonical HTML page: https://theoptionsbench.com/guides/best-options-income-strategies-for-beginners/
---
For most beginners the best options income strategy is the **cash-secured put**, followed by the **covered call**, and then the **wheel** that combines them — in that order. Each is a single, simple trade, fully backed by cash or shares, with a worst case you can live with: owning or selling a stock you already wanted at a price you chose. The fancier, multi-leg and unlimited-risk strategies can wait until those three feel routine. Here is the ranked list, the reasoning, and a worked example for each.
This is an opinionated starting order, not the only one. For the full side-by-side — every strategy's max profit, max loss and capital — compare them in [Options Income Strategies Compared](/strategies/), or answer four questions in the [Strategy Finder](/strategy-finder/) to get pointed at one.
## The short answer, ranked
1. **Cash-secured put** — the one to learn first. Simple, cash-backed, worst case is buying a stock you wanted at a discount.
2. **Covered call** — if you already own 100 shares: income on what you hold, capped upside.
3. **The wheel** — once you have done both: run them in sequence on one stock you would own for years.
4. **Bull put spread** — your first defined-risk, lower-capital trade, when full cash-backing feels limiting.
5. **Poor man's covered call** — covered-call income for a fraction of the capital, once you are comfortable.
## Which one fits you?
| Your situation | Start with | Why |
| --- | --- | --- |
| You want to buy a stock cheaper | **Cash-secured put** | Paid to wait — but you must be happy owning it at the strike |
| You already own 100 shares | **Covered call** | Income on shares you already hold |
| You want a repeatable income loop | **The wheel** | Cash-secured puts, then covered calls, in sequence |
| You have limited capital | **Bull put spread** | Defined risk on far less cash — a step up in complexity |
| You only want the fattest premium, fast | **Usually skip** | A rich premium almost always prices real risk |
In a hurry? The table above is the whole answer. Want the reasoning, a worked example and the honest risk for each? Read on.
## 1. Cash-secured put — start here
A [cash-secured put](/cash-secured-put-calculator/) is a paid promise to buy 100 shares at a price you choose, fully backed by the cash to do it. It is the best first strategy because everything about it is easy to reason about: one leg, no margin, and a worst case — being assigned the shares — that is the entire point, not a failure. You only sell it on a stock you would be glad to own at the strike, so assignment hands you a company you wanted at a discount.
Example
A stock trades at $50. You sell one 30-day $45 put for $1.20 - collecting $120 and reserving $4,500 in cash. Stay above $45 and the put expires worthless: you keep the $120. Fall below $45 and you are assigned - you buy 100 shares at $45, an effective $43.80 once the premium is counted.
**Best for:** a stock you genuinely want to own, bought lower while you are paid to wait.
**The real risk:** not "owning at a discount" — it is being obligated to buy at $45 even if the stock craters to $30. The premium only cushions the first $1.20. Start with the [Cash-Secured Puts course](/learn/cash-secured-puts/) and respect the downside in [can you lose money on cash-secured puts?](/guides/can-you-lose-money-on-cash-secured-puts/)
## 2. Covered call — if you already own 100 shares
A [covered call](/what-is-a-covered-call/) sells someone the right to buy your 100 shares at a higher strike, for premium today. It is as simple as a cash-secured put — one leg, fully covered by stock you already hold — and the worst "bad" outcome is selling your shares at a profit. The catch is that it caps your upside, so you write it on holdings you are content to part with, not the one stock you expect to double.
Example
You own 100 shares bought at $50 and sell a 30-day $55 call for $1.00 - collecting $100. Above $55 your shares are called away at $55: you keep the $100 plus $500 of gain, $600 in all. Below $55 the call expires worthless and you keep the shares and the $100.
**Best for:** anyone already holding 100+ shares they would be content to sell higher.
**The real risk:** you keep the stock's full downside (the premium only cushions it) while your upside is capped at the strike. Weigh it honestly with [are covered calls worth it?](/guides/are-covered-calls-worth-it/)
## 3. The wheel — once you have done both
The [wheel](/wheel-strategy-calculator/) is not a third skill — it is the first two run in sequence: sell cash-secured puts until you are assigned, then sell covered calls on the shares until they are called away, then repeat. It earns its #3 spot because you should not run it until each leg is second nature, and only on a stock you would happily hold through a drawdown.
Example
Sell a $45 put for $1.20 and get assigned at $45 (an effective $43.80 after premium). Now sell a $50 covered call for $1.00. If the shares are called away at $50 you bank the $5 stock gain plus every premium collected - and finish in cash, ready to sell the next put.
**Best for:** one quality stock you would hold for years and want to cycle for income.
**The real risk:** a stock that keeps falling leaves you long the shares the whole way down — premium is a trickle against a big drop. The full mechanics are in [the wheel strategy explained](/guides/wheel-strategy-explained/).
## 4. Bull put spread — your first defined-risk trade
When tying up the full cash for every put starts to feel limiting, the [bull put spread](/what-is-a-bull-put-spread/) is the natural next step. You sell a put and buy a lower-strike put for protection, so the loss is capped at the strike width and your broker reserves only that worst case — a fraction of a cash-secured put's capital. It is the gateway from "fully cash-backed" to "defined-risk," and the right *first* spread because it is still two legs in one direction.
Example
Sell a $45 put and buy a $40 put for a $1.00 net credit - $100 collected. Above $45 you keep the $100. Your loss is capped: the $5 width minus the $1 credit = $400 max, reached below $40. Your broker reserves only that $400, versus $4,500 for the cash-secured put.
**Best for:** defined risk on far less capital, once cash-secured puts feel routine.
**The real risk:** the capped loss ($400) is still four times the credit ($100) — small wins, the occasional larger loss. Model one in the [Bull Put Spread Calculator](/bull-put-spread-calculator/).
## 5. Poor man's covered call — capital-efficient, once you are comfortable
A [poor man's covered call](/what-is-a-poor-mans-covered-call/) swaps the 100 shares for a deep-in-the-money LEAPS call and sells shorter-dated calls against it — covered-call-style income for roughly a quarter of the capital. It is genuinely useful, but it sits at #5 because it adds moving parts, so it suits someone who already understands the covered call it imitates.
Example
Instead of $5,000 for 100 shares, buy a deep-in-the-money LEAPS call - say the $40 strike for about $12 ($1,200) - and sell a 30-day $55 call for $1.00 against it. You run a covered-call-style income trade for roughly a quarter of the cash.
**Best for:** covered-call income on a higher-priced stock without paying for 100 shares.
**The real risk:** the LEAPS expires and pays no dividend, and a sharp drop or a fall in implied volatility can hurt it more than shares would.
## How much capital you actually need
The honest number depends on the stock, not the strategy: a cash-secured put needs the strike times 100 in cash, a covered call needs 100 shares, and a defined-risk spread needs far less. The full breakdown is in [how much money do you need to sell options?](/guides/how-much-money-to-sell-options/) — read it before you start, because capital, not cleverness, is usually the real constraint.
## Where to go next
Pick one strategy and model a real trade before you place it. Compare all five side by side in [Options Income Strategies Compared](/strategies/), let the [Strategy Finder](/strategy-finder/) match you to a starting point, or — if you are starting where I would — begin with the [Cash-Secured Puts course](/learn/cash-secured-puts/). Before you sell anything, learn to [read the options chain](/guides/reading-an-options-chain/) (bid-ask, open interest, delta, IV, the earnings date) and keep to the [house rules](/learn/the-options-bench-approach/) that take [naked calls](/what-is-a-naked-call/), [0DTE](/what-is-0dte/) and four-leg trades off a beginner's table. The best strategy is the simplest one you will actually run with discipline, on a stock you would be glad to own.