Earning 100%+ ROC While Staying Liquid
Defined Risk, High Return: My Iron Fly Playbook
November is fast drawing to a close and I’m off to Argentina in December hence now seems an appropriate time to take stock and review.
Today’s piece is an overview of what’s on my mind currently and some ways I’m continuing to earn yield which I think might come in handy over 2026 should we experience a decent draw down in markets.
A huge thank you to the new subscribers - I’ll keep my thoughts concise and provide links to the ideas mentioned should you wish to get up to speed with the thematics mentioned.
Staying Nimble: Why I’m Focusing on High-ROC, Defined-Risk Trades
Approximately 6 weeks ago I became cautious on the equity side.
With broad equity valuations stretched, liquidity tightening and macro signals get noisy, I prefer to stay nimble, liquid, and opportunistic rather leading into 2026.
Before you panic, relax - I still hold all my main royalty and streamers, I just stopped adding to equities and lightened up insignificant positions around the edges.
My most recent breakdown stands thusly:
My uncle Rick taught me to think of gold as volatile cash, ergo you could say I’m actually sitting now at over two thirds in cash. People’s main gripe with cash is that it holds a negative real yield, yet for those who read my October piece you’ll know how I am earning a real yield on my gold/cash balance to the tune of 1.5% per month.
I have also looked at my equity portfolio and decided to fully insure it over 2026 by buying put options, which were really quite cheap. In fact, they are self-funded by the yield earned from the above tactic and dividends.
So, despite my ostensible bearish posture, I’m actually quite excited to enter 2026 as I I’m in a ‘heads I win’ ‘tails I can’t lose’ position.
If the market tanks, my puts win big and provide a cash injection precisely when it’s most valuable. If it soars, my positions likely do fine.
All the while I get to sit back and observe, completely relaxed and getting paid a real yield to wait.
In conditions like this, my objective is simple:
Maximise return on capital. Eliminate tail risk. Stay flexible.
That naturally draws me to defined-risk premium structures and right now, the most capital-efficient tool in that category is one I haven’t used for ages: the Iron butterfly.
Why the Iron Fly Fits This Market
The iron fly is the cleanest expression of disciplined premium selling.
It’s built for moments when:
implied volatility (IV) is overstated
realised volatility (HV) stays muted
the market narrative is panicked
but the underlying isn’t actually moving as much
The structure provides:
Defined risk
High ROC (commonly 30–150%+)
Accelerating theta
Neutral directional exposure
Capital efficiency without uncovered risk
It’s a way of getting paid when the market is emotional.
How The Iron Fly Works
Sell the at-the-money (ATM) call + put
Buy wings above and below to cap risk
Premium received = max profit
Wing width − credit = max loss
You win if realised movement < implied movement i.e the asset stays range-bound
It’s extremely negative vega (short-volatility) with guard rails.
The Royalty King’s Rules for Iron Flies
Don’t try this at home - you will lose money!
Enter 30–37 days to expiration (DTE)
The sweet spot for maximum theta for ATM options. Exit before 7 DTE
Enter on a down day (Ideally)
Down days = elevated IV → richer credit, cheaper wings.
Initial profit target: 15–20% of planned capital
Planned capital = 2 × initial capital at risk
A simple, disciplined framework for harvesting gains.
Max loss: 20% of planned capital
Cut losers early. Survive to sell premium again.
Probability of Profit ≥ 50%
These rules keep the strategy methodical and effective.
If you’d like me to take you through two real life examples of this tactic with trades I am putting on as you read this, become a premium reader today and gain full access.
