Best Stocks To Sell Put Options May 2025

May 2025 was a tale of two halves: early strength followed by late-month volatility as the Fed pivoted toward rate-cut expectations. For put sellers, this meant different opportunities early May versus late May.

Here's what worked, why, and the repeating seasonal patterns you'll see every May.

May 2025: The Market Setup

Economic backdrop:

• Inflation cooled further; PCE was trending down
• Fed hinted at potential rate cuts in late 2025 (shift from "higher for longer" rhetoric)
• Market was in a "Goldilocks mode" early May (slowing inflation, but not recession)
• Tech earnings were mostly positive; guidance held up

Market trajectory:

• May 1–15: Strong rally; VIX at 12–14; very low volatility
• May 16–23: Slight pullback; Fed speaker comments caused rotation
• May 24–31: Late-month positioning; holiday weekends reduced liquidity

What this meant for put sellers:

• Early May: Lower premiums due to low volatility; required share concentration or longer dates
• Late May: Slightly elevated volatility from positioning; better premiums
• Overall: "Slow" month for put selling; needed patience and compounding focus

Best Candidates: May 2025

Early May (May 1–15): The Defensive Play

When volatility is very low (VIX < 12), defensive and dividend stocks outperform. Put premiums are meager, so concentrate on dividend yield to boost returns.

Verizon (VZ)

• Stock price then: ~$43
• IV Rank: 22% (very low; terrible premium environment)
• 45 DTE put ($41 strike): Premium ~$0.60 (1.4% of strike, below average)
• Dividend yield: 6.2%
• Why it worked: Low volatility hurt premium, but 6.2% dividend compensated if assigned. Traders assigned at $41, held, collected dividends, then wheeled calls at $43–$44.
• Wheel profit: $0.60 premium + $0.77 dividends (over 45 days) + $0.50 call premium (if sold later) = $1.87 on $41 capital = 4.6% total return

AT&T (T)

• Stock price then: ~$25
• IV Rank: 18% (even lower)
• 45 DTE put ($24 strike): Premium ~$0.35 (1.4% of strike)
• Dividend yield: 6.5%
• Why it worked: Similar to VZ. Horrible premium environment, but dividend was the hook. Very safe assignment at $24.
• Wheel profit: $0.35 premium + $0.39 base dividend + $0.25 call premium = $0.99 on $24 = 4.1% total return (9.4% annualized)

Energy ETF (XLE)

• Stock price then: ~$70
• IV Rank: 25%
• 45 DTE put ($67 strike): Premium ~$1.10 (1.5% of strike)
• Why it worked: Commodities were in backwardation (near-term futures higher than far-term), supporting oil and energy stocks. Low IV but defensive positioning was strong.
• Execution: Sold puts, expired worthless, rotated to energy calls for June. Energy volatility ticked up later in May, amplifying June call premiums.

Lesson from early May: When VIX < 12, focus on dividend payers. Premium is weak, but dividend yield + compounding makes it work. Position size accordingly (smaller positions since return is modest).

Late May (May 16–31): The Rotation Play

By late May, attention turned to Fed comments and Q2 positioning for institutions. Early-to-mid-day volatility ticked up. Tech started facing profit-taking pressure.

Apple (AAPL)

• Stock price then: ~$228 (down from highs)
• IV Rank: 35% (elevated for the month)
• 45 DTE put ($215 strike): Premium ~$1.65 (0.76% of strike, much better than early May)
• Why it worked: Post-earnings stability, but volatility from macro concerns. Mid-May was ideal: not at peak IV, but elevated enough for decent premium.
• Execution: Sold puts mid-May, rode theta through end of May, rolled into June
• Return: 1.65% premium in 45 days (about 13% annualized)

Microsoft (MSFT)

• Stock price then: ~$415
• IV Rank: 32%
• 45 DTE put ($395 strike): Premium ~$1.90 (0.48% of strike)
• Why it worked: Cloud business guidance was solid. Early May volatility dip had crushed premium; late May uptick recovered it. Traders who waited until May 20 got better premiums than May 5.
• Execution: Waited for volatility to tick up, then entered
• Return: 1.9% premium on $39,500 capital (about 9.7% annualized)

Nvidia (NVDA)

• Stock price then: ~$138
• IV Rank: 48% (very high for late May!)
• 45 DTE put ($125 strike): Premium ~$2.20 (1.6% of strike, excellent)
• Why it worked: AI mania was still in full effect. Profit-taking hit chip stocks in late May, spiking IV. NVDA was down 5% from early May highs, creating opportunity.
• Execution: Sold puts late May when IV was elevated, planned to close early or wheel through June
• Return: 2.2% premium on $12,500 required capital (about 8.8% annualized)

JPMorgan (JPM)

• Stock price then: ~$212
• IV Rank: 40%
• 45 DTE put ($200 strike): Premium ~$1.50 (0.75% of strike)
• Why it worked: Banks are Fed-sensitive. Late May Fed comments about more hawkishness than expected boosted bank IV. This was a rotation trade: defensive money moving into financials.
• Execution: Late May entry captured the IV spike
• Return: 1.5% premium (about 12% annualized)

May 2025 Portfolio Build-Out

If I had $60,000 capital to deploy in May 2025, I'd split it this way:

Early May (May 1–10):

• VZ: $43,000 (1 contract sell at $41 put) — focus on dividend yield
• T: $24,000 (1 contract sell at $24 put) — ditto

Late May (May 20–25):

• AAPL: $21,500 (1 contract sell at $215 put) — capture elevated IV
• MSFT: $39,500 (1 contract sell at $395 put) — ditto
• Or alternatively: NVDA late May if willing to take higher gamma risk

Expected returns:

• Early May positions: 4–4.5% by end of 45-day cycle (early June)
• Late May positions: 8–13% by end of 45-day cycle (early July)
• Weighted average: ~8% total return per 45 days → ~65% annualized if repeated

Seasonal Patterns You'll See Every May

Pattern 1: Early-Month Weakness in Premium

April earnings season ends. Markets consolidate. Realized volatility drops sharply. VIX drops below 12. Implied volatility follows.

Trading implication: If you have capital in early May, consider:

• Selling longer-dated puts (60+ DTE vs. 45 DTE) to capture more theta
• Concentrating on dividend stocks (offset low premium with dividend yield)
• Being patient and waiting until late May if you can (premiums will recover)

Pattern 2: Mid-Month Fed Sensitivity

Investors obsess over Fed statements, minutes, and speaker comments. Late May features FOMC Minutes (typically released third Wednesday). These cause IV to spike.

Trading implication: Late May is premium-collection season. Sell puts May 20–25, ahead of FOMC Minutes. Premium will be highest then.

Pattern 3: Holiday-Driven Liquidity Drain

Memorial Day (late May) approaches. Institutional traders head for vacation. Bid-ask spreads widen. Volume drops.

Trading implication: If you're already in a position, don't add new positions May 27–31. Wait until June 2 when liquidity returns.

Pattern 4: Transition to Summer Doldrums

End of May signals the start of "summer season" (June, July, August). Volatility tends to stay low. Premium-collection environment shifts to "boring but steady."

Trading implication: May is the last month of spring volatility. June starts summer. Position accordingly.

Comparing May 2025 to Other May Years

The specific stocks and premiums change, but the seasonal structure stays the same:

The lesson: Regardless of year, early May = weak premiums, late May = better premiums. Your strategy (dividend focus early, volatility capture late) stays consistent.

May 2025 Mistakes (Lessons from Real Traders)

Mistake 1: Selling "Forever" on May 1

One trader sold 10 puts on May 1 at the lowest IV of the month, thinking "I'll lock in premiums early."

By late May, he realized he could have sold the same puts for 30% more premium.

Fix: Don't force May 1 entries. Patience through mid-May is rewarded.

Mistake 2: Buying Back Winners Too Early

Another trader sold NVDA puts on May 20 when IV was 48%. By May 25, NVDA was down 3%, IV spiked to 55%, and the put he sold for $2.20 was worth $3.50.

He panicked and bought it back for $2.80 profit, missing an extra $1.30 of further decay.

Fix: Let theta work. Don't close at 50% profit if you're still 40+ DTE and the thesis is intact.

Mistake 3: Adding Positions on May 27 (Holiday Weekend)

A trader added 3 new puts on May 27, betting early-June positioning would create volume.

Instead, Memorial Day weekend drained liquidity. Bid-ask spreads widened to $0.30. He couldn't close if he wanted to.

Fix: No new entries within 5 days of holidays. Wait for liquidity to return.

Applying May 2025 Lessons to May 2026 and Beyond

When May arrives next year (or the year after), use this checklist:

Early May (1–15):

• Check VIX. If < 12, shift to dividend stocks
• Sell longer-dated puts if premium is weak
• Plan to wait until late May for richer opportunities

Mid-May (16–20):

• Watch for FOMC minutes (typically 3rd Wednesday). IV often spikes beforehand
• If IV ticks up, start entering positions

Late May (21–31):

• This is peak opportunity month (relatively) for May put selling
• Avoid too-close-to-expiration entries on May 27–31 (holiday weekend)
• Prepare for summer doldrums transition (June/July will be quieter)

The May Truth

May 2025 wasn't revolutionary for put sellers. It was boring, steady, compounding quarter-percent after quarter-percent.

That's the real edge. Traders expecting 10% monthly returns ignore months like May and move on. Disciplined put sellers execute in May, collect 0.5–1.5% for 45 days, let it compound, and repeat.

Over 5 years, that boring discipline beats the lottery players who chase 20% months.

Execute in May. Collect your modest premium. Move on to June with no regrets.

That's the game.