This is a new segment that I’m calling “The Life of a Trade” and it is intended to show you key moments in the trading cycle including the Opening, Monitoring & Management, and Closing of trades. When I open the trade, I don’t know what is going to happen either, so it’s a way to talk through trades with you and review my decision making process in live trading situations. Hopefully these will assist you in understanding the Put Path Options Trading System and what we look for throughout the trading process. These segments will add some uncertainty and excitement as we move through real world events and see how actual trades shake out. We don’t know if these will be winners or losers when we open them, so we’ll review decision points together and I’ll explain why and how everything is done! Should be fun doing a post-mortem after the trade as well and look for teaching points.
Most of these trades will have at least two Episodes (or check in points / days) whereby we deep dive the opening, monitoring, management (if needed), and closing of my actual trades. Shortly, these trades will be put on the live page called the Real Time Trades for Put Paradise Members, and all of them are listed on the weekly trade log page (called “The Score”) upon entry and exit. These trades will be randomly selected to give you a sense for how each of the 12 underlyings trade and offer helpful insights and tips for each underlying as well as my commentary and thought processes throughout.
So for this post, we are trading USO. So USO is the stock symbol for the United States Oil Fund, LP. It is an exchange-traded fund (ETF) that trades on the NYSE Arca exchange. The fund’s investment objective is to reflect the daily changes in percentage terms of the spot price of light, sweet crude oil. The embedded video above is split up into 3 Episodes as follows:
Episode One: Opening the Trade (12/26/2025)
USO is 1 of our 12 underlyings that we trade weekly. USO is a fairly low price ETF that is has marginal liquidity. It is not my favorite trading vehicle but it offers some noncorrelation benefits when compared to SPY and has performed well over time. So here is how the trade set up at the Open on 12/26/2025:
- USO Stock Price @ 70.15
- Delta = -0.16 (at the $64 Strike Put)
- 1/23/2026 Expiration
- Days To Expiration (DTE) = 28
- Lot size = 10
- STO (Sell To Open) $64 Strike Put for $0.57
- BTO (Buy To Open) $60 Strike Put for $0.24
- Credit Received = $0.33
I typically try to get $0.36 credit for these spreads in USO. I was only able to get $0.33 but that was acceptable since we were only $4 wide. Sometimes we can’t get the $5 wide strike prices because some strike prices are not available. In this case that is exactly what happened. We would have preferred to have bought the $59 strike price for protection, but I had to buy the $60 as the strikes jumped in increments of $5 from $60 to $55. I did not want to go up to sell the $65 because the delta was too high (closer to the money). The breakeven point for this trade was $63.67, so the underlying can go down more than 8% before we hit the breakeven point of $63.67, so we had a reasonable safety margin (drop %). Per our normal process, I went in and entered my closing order for the spread at $0.02 as a “Good til canceled” order in Robinhood. Interestingly enough, the day after the trade (when I shot the video), USO had dropped 2% down to $68.75 (from $70.15), resulting in a valuation increase to $0.46 and a current loss of $130 (39% loss).
Episode Two: Monitoring the Trade (1/9/2026)
The next episode monitored this trade on Day 14 into the life of the trade, exactly half way through the time cycle. Oil had moved up slightly to around $70.90 and our Delta improved. We took advantage of time decay. The value moved down from $0.33 to $0.06 for a total current profit of $270 (81.82% profit), even though we were only 50% through the life of the trade. Therefore the $0.06 valuation is getting closer to $0.02 and we would project that this trade would be closing shortly.
Episode Three: Closing the Trade (1/20/2026)
The next episode checked in with this trade on Day 25 into the life of the trade. On 1/20/2026, our Good til Canceled order executed at $0.02 and the trade was closed in Robinhood. It likely would have been filled on 1/29/2026, but that was the MLK holiday so the market was closed. During this last 11 days, oil had moved up slightly again to just over $72.31. Again, we took advantage of time decay and oil stayed well above the strike price of $64. The value moved down from $0.33 to $0.02 for max profit in our system ($310). So we were risking $4,000 and made $310, for a return on capital of 7.75% in 25 days.
Takeaways
This wasn’t the most exciting trade to start of “The Life of a Trade”, but maybe that is the point! The Put Path is not intended to be dramatic or thrilling, but rather a rules based methodology that helps you stay consistently profitable. We play the percentages and typically get 85-90% winners. This helps us get stable returns in markets that are going up, down and sideways. I’m planning to sprinkle in these “Life of the Trade” segments from time to time for all 12 names so you can review my commentary for all of our underlyings in real life trading situations. Leave a comment below if you have any questions!
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