No Put Path summary is complete without sharing the risks. I want to make certain that you understand that I make no guarantees that you’ll make nearly 50% annual rate of return. I am not a professional Options Trader. I do not have my Series 7. I’m not a professional Stock Trader. I’m not an industry insider or Wall Street Hedge Fund manager. I’m just a guy with a day job, who knows some options experts, lost a lot of money trading stupidly and became self-taught over years and years to develop a system that delivers consistent returns over time. In my mind, I’m successful precisely because I’m an industry outsider so I had to think differently to maximize my time so I could work my full time job. My returns have typically been around 50% in bull markets and bear markets, during pull backs, corrections and irrational exuberance. The system adjusts due to the Black-Scholes model to account for volatility, deltas/win probability, pricing, etc. If you stick to the system precisely as I’ve laid it out, you likely will consistently make money, lots of it.
However, there is one scenario where we will not. The dreaded Black Swan Event. What is a Black Swan Event in this context? A Black Swan Event in the stock market is a market crash that exceeds six standard deviations (technically > 9.5% in one day), making it exceedingly rare from a probabilistic standpoint. The stock market crash of 1987 is an example of a Black Swan Event. On Oct. 19, 1987, the Dow Jones Industrial Average tanked by almost 23%, the largest single-day drop in history. The S&P 500 dropped by 20.5% for the largest one day drop in its history. There have been six Black Swan Events since 1896, so roughly one every 21 years over the last 129 years (as of 2025). Of course, they do not occur at regular intervals and are unpredictable by definition (and seem to happen in clusters).
Here are the six worst days for the S&P along their approximate % drop:
10/19/1987 (−20.47%) Black Monday
10/28/1929 (−12.34%) Great Depression
3/16/2020 (−11.98%) Covid-19
10/29/1929 (−10.16%) Great Depression
11/6/1929 (−9.92%) Great Depression
3/12/2020 (-9.51%) Covid-19
So why am I detailing these events? Because they are the thing that could kill your portfolio. When you close your positions at a 2X loss you are minimizing your losses. As long as you close out then you are OK, but if you don’t because you are not paying attention to the market, or your phone died, or you are on vacation or we are having a Black Swan Event, then we all are in big trouble. As the underlying goes down, you approach the hyperbolic downside of the normal curve and the losses become extreme. Although this has never happened to me with these types of Credit Spreads, in the worst case, you can theoretically lose the max. So, for a 1 lot where your Max Loss is $450 and your Max Profit for QQQ is $50, you could theoretically lose $450. If you sell out at the 2x loss, it would only be $150 for a $100 net loss. In the worst-case Black Swan Event you could possibly lose all of the capital you currently have invested. In all of my current trading accounts as of this writing, I could theoretically lose around $72,000 in one day. This is a sobering thought; however, please keep in mind that I have never had a max loss in even one Put Credit Spread with the Put Path system in any underlying, which is over 1,000+ trades since 2020. So, to lose on all 12 is infinitesimally small from a statistical standpoint. Theoretically, it could happen, but if it did, I’m guessing it would take some global cataclysmic event to occur and we would have a lot more to worry about besides our options positions.
Now the real worst case is that the market drops overnight so that we cannot trade out of the Black Swan Event and the Market Opens at a > six sigma drop. This is truly disastrous, and we cannot trade out of it. Hopefully the next Black Swan Event will occur more slowly throughout the trading day, which will give us the opportunity to take our losses and quickly get out at a 2x loss, or maybe we would’ve already closed out of most of our positions prior to the event due to previous price reductions in the market. I just want you all to be aware that statistically speaking, every 21 years or so we are likely to get a Black Swan Event that may require us to take Max Losses that could theoretically wipe out your entire currently risked capital. If you are willing to take that risk, then stick with me and we’ll keep raking in our incredible annual returns. Note that even if the stock market were to drop during a Black Swan event, we would likely only lose on 6 of the 12 underlyings: QQQ, IWM, SPY, DIA, SMH, and XBI would be the worst hit. The other 6 of the 12 would likely offer protection against the event including GLD, IBIT, USO, IYR, TLT and VIX.
Put Paradise 
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