The Micro Put Ladder: One Small Put a Week

What the ladder is

Most put-selling strategies wait for the perfect setup. The micro put ladder takes the opposite approach: it sells one small put every week, on schedule, whether the week looks exciting or not. Each sale is a single "rung." Over time the rungs stack into a ladder — a steady cadence of small premiums across futures markets like stock indexes, energy, and metals.

Each rung is a put on a micro futures contract — the smaller sibling of a standard futures contract, with a fraction of the size. The put is sold about 45 days before it expires, at a strike price well below where the market is trading today. We collect a premium for taking on a simple obligation: if the market falls to the strike by expiration, we buy at that price.

Why micro contracts

Size is the whole point. A put on a full-size futures contract can carry thousands of dollars of risk in a single trade, which forces an all-or-nothing decision every time. A micro contract carries a fraction of that, so each weekly rung stays small. Small rungs mean no single week matters very much — a bad rung is a bruise, not a broken bone — and the strategy can run across several different futures markets at once instead of betting on one.

Micro size also keeps the math honest. When every rung is small, there is no temptation to skip a week because a position "feels" too big, and no pressure to hold a loser hoping it comes back. The ladder's edge, if it has one, comes from the cadence: many small, disciplined sales, managed the same way every time.

How each rung is managed

Every rung follows the same exit rules from the day it is sold:

• Take the win early. If the put's value falls to half the premium we collected, we buy it back and keep the other half. Most rungs end here — a small, quick win, and the slot is free for the next rung.
• Leave on schedule. If a rung is still open when it has 21 days left, we close it either way. Options decay fastest in their final weeks, but so does the risk of a sudden move; the ladder does not stay for that part of the ride.
• Cut the loser. If the loss reaches twice the premium collected, we close the rung. No hoping, no averaging down.
• No rolling. We never roll a rung. If the market falls toward a put, the next week's put, sold at a new lower level, is the adjustment.

What can go wrong

Selling puts means being willing to buy after a fall, and falls can be fast. A market can gap down through a rung's strike overnight; the loss rules cap each rung at roughly twice its premium plus whatever slippage a fast market adds, but "roughly" is doing real work in that sentence — in a genuine crash, exits happen at the prices available, not the prices in the plan.

The quieter risk is a slow grind down. Week after week of new rungs sold into a falling market means week after week of small losses at the twice-premium exit, and those add up. The ladder smooths the size of each trade; it does not remove the direction of the risk. If futures markets fall hard and stay down, the ladder loses money steadily instead of suddenly.

There is also assignment to understand: if a put expires in the money, it becomes a long micro futures position at the strike price. That position can keep losing if the market keeps falling, and it carries margin requirements until it is closed. Our exit rules are designed to close rungs before expiration — the 21-day rule exists largely for this reason — but a market closed for a holiday or locked limit-down can leave a rung open longer than planned.

How we run it

The ladder runs as one of our paper strategies: every rung is screened from live futures options chains, published with the morning's trade ideas, and tracked from entry to exit in the open — win or lose, like everything else we publish. Paper tracking means no real money is in these trades; it is how a strategy earns trust before it earns capital. One rung a week, small by design, managed by rules that were written before the trade was placed — that is the whole idea.