Inside today’s Daily Journal…

Trading gets a bad rap.

When most people hear the word trading, they picture some RedBull chugging guy glued to a screen, watching charts flicker, trying to catch the exact moment a stock hits bottom before it rockets back up.

Buy low, sell high… Time the market. Get in before everyone else figures it out.

This approach carries a negative connotation among most serious investors for one good reason – because it’s a losing proposition.

Study after study arrives at the same conclusion: the overwhelming majority of active traders underperform a simple index fund. Below are just a few examples…

The problem isn’t effort or intelligence. It’s the game itself.

Trading around short-term price movements requires you to be right about both direction and timing: know what to buy, when to buy, and when to sell. And to do this consistently… The deck is stacked against you before you even enter the casino.

But in May of last year, Porter and I (Ross Hendricks) set out to prove a point: not all trading is

reckless speculation. We built a framework that doesn’t require market timing, technical analysis, or the belief that we’re smarter than every other participant staring at the same price charts. It’s a disciplined, systematic, and genuinely misunderstood approach that flips the traditional trading paradigm on its head.

We started by acknowledging one simple reality: no one can consistently anticipate where stock prices will trade in a given day, week, or month. So instead of predicting the unpredictable, we build a portfolio that can handle whatever the market throws at us. The secret is non-correlation, meaning we create a series of trades that offset one another. When one part of the portfolio is underperforming, the other non-correlated return streams kick into high gear. This way, we create multiple ways to win – regardless of whether the market goes up, down, or sideways.

This is the same basic strategy Porter uses to manage the money in his family office, which has absolutely trounced the market since inception. It’s the same strategy I’ve used in my own portfolio for generating 50% annualized returns. And it’s the same one I taught my own mother, who went from earning 5% in money market funds to crushing the S&P 500.

It’s also the same strategy we have been using in The Trading Club. Porter put $100,000 of his own cash into a live trading account to launch this new Porter & Co. service in May 2025, with the goal of earning 20% to 30% annualized returns.

Less than 10 months in, that $100,000 has now grown into $131,520 as of yesterday’s close – a 31.5% return in under 10 months, and more than double the market’s 13.5% return over the same period:

So, how did we do it?

Today, we’ll showcase the core strategy that makes up the bread and butter of our trading approach. This doesn’t require perfectly predicting the future, technical analysis, or constantly buying low and selling high. It only requires two things: knowing what something is worth and having the patience to wait.

That, in essence, is the art of selling options.

A put option gives its buyer the right to sell shares at a set price – called the strike price – before a set date known as the expiration date. The put buyer gains price certainty that limits their downside risk by locking in a future sales price regardless of how far the shares might fall by expiration. So in essence, put options provide a form of insurance for the stock market. And like all forms of insurance, it comes at a cost, in the form of an upfront cash premium.

The put seller on the other side of the trade earns the cash premium. And in exchange, the put seller guarantees to buy shares at a set price before the expiration date. If the stock falls below the strike price, the put seller is obligated to buy shares at the strike price. Conversely, if the stock stays above the strike price, the put seller keeps the premium and walks away from the obligation once the option expires.

Here’s the key: we only sell puts on stocks we want to own at current prices. That means we only write insurance against outcomes that we’re happy to “pay out” on: so we end up owning a stock that we want to own anyway. And in exchange for agreeing to buy the shares, we collect cold hard cash premiums.

Read that again slowly. As a put seller, you get paid to agree to buy something you already wanted, at a price you already found attractive.

This approach flips the traditional trading paradigm on its head. You don’t need to perfectly time the bottom in prices, and outsmart the market by constantly buying low and selling high. Instead, you let the market come to you, by naming your own price and then get paid to wait.

Selling puts isn’t about predicting the market. It’s about being paid to wait for the stocks you want to own — at the price you decide to pay.

Let me show you how this works with a tangible example.