Answer Block

Answer Block: For 74 days, our trading system reported success while executing exactly zero trades.

The 74-Day Silence

For 74 days, our trading system reported success while executing exactly zero trades.

The dashboard showed green. CI passed. Workflows triggered on schedule. Every metric looked healthy.

But our P/L was $0.00.

On Day 74—January 13, 2026—we finally asked the hard question: Why isn’t this thing actually trading?

The answer would force us to rebuild our entire strategy from scratch.

The Original Dream: $100/Day

Our North Star was ambitious but seemingly achievable:

Goal: $100/day profit
Account: $5,000
Strategy: Cash-Secured Puts (CSPs)
Timeline: Start immediately

The math looked simple:

  • Sell 2 CSPs per week
  • Collect ~$50 premium each
  • $100/week × 52 weeks = $5,200/year
  • 104% annual return

What could go wrong?

The Math That Killed the Dream

CSP Capital Requirements

A Cash-Secured Put requires holding enough cash to buy 100 shares if assigned.

For our target stocks:

Stock Price CSP Collateral Required
SOFI ~$15 $1,500
F ~$10 $1,000
T ~$24 $2,400

With $5,000 in capital:

  • Maximum CSPs on T: 2 positions
  • Maximum CSPs on SOFI: 3 positions

The Real Daily Income

2 CSPs × $50 premium × 1 trade/week = $100/week
$100/week ÷ 5 trading days = $20/day

North Star: $100/day
Reality: $20/day

Gap: 80%

Our “achievable” goal was 5x more than our capital could support.

The Worse News: Win Rate Requirements

Even $20/day assumed 100% win rate. Let’s do the real math:

CSP premium collected: $50
Max loss if assigned: $1,500 (SOFI drops to $0)
More realistic loss: $500 (SOFI drops 33%)

To break even at 70% win rate:
  7 wins × $50 = $350
  3 losses × $500 = $1,500
  Net: -$1,150

Required win rate for profit: 91%+

Professional options traders average 60-70% win rates. We needed 91%.

The North Star wasn’t ambitious—it was mathematically impossible.

The Strategy Pivot: Credit Spreads

How Credit Spreads Work

Instead of securing the entire put with cash, we buy a cheaper put below our sold put:

SELL: SOFI $15 put (collect $1.00 premium)
BUY:  SOFI $10 put (pay $0.20 premium)
─────────────────────────────────────────
Net credit: $0.80 ($80 per contract)
Max loss: $5.00 spread width - $0.80 credit = $4.20 ($420)
Collateral required: $500 (not $1,500!)

The Capital Efficiency Revolution

Metric Cash-Secured Put Credit Spread
Collateral per position $1,500-2,400 $500
Max positions with $5K 2-3 10
Premium per position $50-100 $60-80
Max weekly income $200 $800
Max daily income $40 $160

Credit spreads gave us 5x capital efficiency.

The New Math: Still Not $100/Day

Before celebrating, we ran the honest numbers:

Hold-to-Expiration Scenario

Premium collected: $80
Max loss (if wrong): $420
Risk/reward ratio: 5.25:1 against us

Break-even win rate: 84%

That’s still too high. We needed to manage risk better.

With Active Management

Take profit at 50%: +$40
Stop loss at 100% of credit: -$80
Risk/reward: 2:1 against us

Break-even win rate: 67%

Now we’re in achievable territory—but $100/day still requires more capital.

Expected Value by Win Rate

Win Rate EV per Spread Daily (10 spreads)
50% -$20 -$40/day (losing)
60% -$4 -$8/day (losing)
67% $0 Break-even
70% +$4 +$8/day
80% +$16 +$32/day

Reality: With 70-80% win rate and proper management, we can make $8-32/day—not $100/day.

The Revised North Star

Old Target (Impossible)

  • $100/day from $5K
  • 2% daily return
  • 500% annualized
  • Required 91%+ win rate

New Target (Achievable)

  • $25/day from $5K
  • 0.5% daily return
  • 125% annualized (still excellent)
  • Requires 70% win rate

Timeline to Original North Star

Month Capital Win Rate Needed Potential Daily
Now (Jan) $5,000 70% $25
Month 6 $8,500 70% $42
Month 11 $13,300 70% $100

We can reach $100/day—but it takes 11 months of disciplined compounding, not day one magic.

The First Execution Attempt

On January 13, we tried to execute our first credit spread.

It failed.

What Went Wrong

  1. Hardcoded strike prices: Used $15/$10 for SOFI, but the stock was trading at ~$27
  2. No option discovery: Didn’t query Alpaca’s option chain before ordering
  3. Bad timing: Triggered at 3:52 PM ET—8 minutes before market close

The Fix

# BEFORE: Hardcoded strikes (wrong)
short_strike = 15.00
long_strike = 10.00

# AFTER: Dynamic strikes from live data
current_price = get_current_price("SOFI")  # $26.85
short_strike = find_atm_put(current_price)  # $27.00
long_strike = short_strike - spread_width   # $22.00

The strategy was sound. The execution needed work.

Lessons Learned (LL-179, LL-180, LL-182, LL-185)

1. Math Before Dreams

Our $100/day goal sounded good in planning meetings. It died on contact with a calculator.

New Rule: Run break-even analysis before committing to any target.

2. Capital Efficiency > Premium Size

$80 premium on $500 collateral beats $100 premium on $2,400 collateral.

New Rule: Optimize for return on capital, not raw premium.

3. Win Rate is Everything

At 60% win rate: Losing money
At 70% win rate: Small profits
At 80% win rate: Good profits

New Rule: Track every trade. Know your actual win rate.

4. Query Before You Order

Never send an options order without first verifying the contract exists.

New Rule: API call to fetch option chain → validate strikes → then execute.

5. Time Your Entries

Market close is the worst time to enter positions. Low liquidity, wide spreads, no time to adjust.

New Rule: Execute between 10:00 AM and 3:00 PM ET.

The Phil Town Conflict

Here’s an uncomfortable truth: Credit spreads violate Phil Town’s Rule #1.

Rule #1: Don't lose money.

Credit spread math:
  Risk $420 to make $80
  Potential loss: 5x potential gain

This is the opposite of Phil Town’s “buy dollars for fifty cents” philosophy.

Our Mitigation

  1. 30-delta strikes: Not ATM. Gives 70% probability of profit as margin of safety.
  2. Strict stop-losses: Exit at 100% of credit received. Never ride to max loss.
  3. Position sizing: Max 5% of account per trade. Can survive 20 consecutive losses.
  4. No earnings plays: Exit before earnings. Avoid binary events.

We’re not pretending credit spreads are Rule #1 compliant. We’re acknowledging the conflict and managing it.

What We’re Tracking Now

Required Metrics (30+ Trade Sample)

Metric Target Current
Win rate >67% N/A (0 completed trades)
Average win $40 N/A
Average loss $80 N/A
Profit factor >1.0 N/A
Max drawdown <10% N/A

Decision Framework

After 30 trades OR 90 days (whichever comes first):

  • Win rate ≥70%: Continue and consider scaling
  • Win rate 60-70%: Maintain, refine entries
  • Win rate <60%: Stop trading, reassess everything

Portfolio Status (End of Day 74)

Metric Value
Portfolio equity $4,969.94
Daily P/L -$17.94 (-0.36%)
Open positions 2 (SOFI stock + put)
Completed spreads 0
Days until target 90 (paper trading phase)

Yes, we lost money on Day 74. The first real trades after 74 days of silence resulted in a small loss.

That’s fine. We’re learning.

What’s Next

January 14 (Tomorrow):

  • Execute first complete credit spread
  • Target: SOFI or SPY, $5 wide, 30-45 DTE
  • Enter between 10:00 AM - 2:00 PM ET

This Week:

  • Complete 2-3 credit spread entries
  • Document every trade with entry/exit prices
  • Begin building real win rate data

This Month:

  • Reach Day 90 of paper trading
  • Accumulate 10-15 completed trades
  • First statistical significance checkpoint

The Bottom Line

The $100/day dream died on January 13. In its place, we built something better: a strategy that actually works with our capital.

$25/day doesn’t sound as exciting. But $25/day that’s achievable beats $100/day that’s impossible.

And with compounding, $25/day today becomes $100/day in 11 months.

That’s not failure. That’s a plan.

This post documents lessons LL-179, LL-180, LL-182, and LL-185. Strategy research from LL-188.

All trades are paper trades during our 90-day validation period. This is not financial advice.

Evidence: https://github.com/IgorGanapolsky/trading

*Related: Complete Guide to AI Iron Condor Trading The Silent 74 Days Our North Star Strategy*