When most investors see a great company like Microsoft selling off, they fall into one of two camps:

  • Camp #1: “Buy the dip!” (and hope the dip stops dipping)
  • Camp #2: “I’ll wait.” (and often never pull the trigger)

I prefer a third option:

Get paid to wait… and only buy the stock if it comes to my price.

That’s the core idea behind one of my favorite income strategies: selling cash-secured puts.

It’s a simple concept — and when it’s used on world class companies, it can be a powerful way to generate relatively safe, high income without taking wild risks.

The Big Idea: You Name the Price — and the Market Pays You to Wait

Here’s how a cash-secured put works in plain English:

  • You choose a high-quality stock you’d be happy to own.
  • You pick a price you’d love to buy it at (lower than today’s price).
  • You sell a put option at that strike price.
  • In return, you collect cash up front.

So instead of buying the stock at the current market price, you’re saying:

“I’ll buy it… but only if it drops to my price. And until then, pay me.”

Why This Can Produce High Income (Especially When Stocks Get Volatile)

Here’s what most people miss:

Option premiums spike when volatility spikes.

When a stock drops quickly, fear rises, implied volatility rises, and option premiums get “juiced.” That means option sellers can often collect much more income than normal — even while choosing strike prices that sit below the current market price.

And this is why volatile markets can actually be a great environment for option sellers:

  • You can get paid more premium for the same strike price.
  • You can build in more downside cushion.
  • You can earn high annualized income on relatively short time frames.

It’s not magic. It’s simply letting the market pay you for taking the other side of short-term fear.

But What If the Stock Keeps Falling?

This is the question I always get.

And it’s an important one — because yes, even if you sell a put “safely” below the current price, a stock can still fall hard enough to threaten your strike.

But here’s the good news:

You’re not helpless.

One of the advantages of selling puts on highly liquid, world-class stocks (like Microsoft) is that you often have options — literally — for how to manage the trade.

For example, if a stock drops sharply after you sell your put, you can often roll the position:

  • Roll down to a lower strike price (reducing your potential assignment price), and/or
  • Roll out to a later expiration date (buying time),
  • Sometimes while collecting additional premium in the process.

In other words: the strategy isn’t “set it and forget it.”

It’s a rules-based approach where you can actively manage risk — and in many cases, generate even more income when volatility spikes.

Why I Like Doing This With World-Class Companies Like Microsoft

I’m not interested in selling puts on questionable companies where assignment would feel like punishment.

I want the opposite.

I want companies where, if I’m assigned, I can say:

“Fine. I’ll take the shares.”

Microsoft is a perfect example of that kind of underlying stock:

  • It’s a global leader with enormous cash flow.
  • It has a long history of dividend growth.
  • It has deep options liquidity (tight spreads, high volume).
  • And it often offers rich premiums when volatility spikes.

So when MSFT gets volatile, I’m not panicking.

I’m looking at it as an opportunity to get paid exceptionally well on a stock I’d be comfortable owning long-term.

The Takeaway

If you like the idea of generating high income without chasing stocks higher, cash-secured puts are worth understanding.

Done correctly, they can allow you to:

  • Collect cash income up front,
  • Set a lower “buy price” for great companies,
  • And manage risk with rolling adjustments if the stock moves against you.

It’s not risk-free — no strategy is.

But in the right names, with the right rules, it’s one of the most practical ways I know to generate consistent, high option income in today’s market.

Good trading!
Greg Patrick

P.S. If you’d like to see the real-money option trades I’m making — including exact strikes, expirations, premiums, and how I manage positions when the market moves — I share all of that with subscribers to Dividends & Income Select. That’s where you’ll find my full trade alerts.