The floor price is the minimum premium Income Factory considers acceptable for a trade. If the live market price for the contract is at or above the floor when you go to place the trade, proceed. If it's below the floor, skip the trade and wait for next Friday.

It exists because there's always a gap between when the analysis is generated (Friday morning, using end-of-day data) and when you place the trade. Markets move. The floor price is the go/no-go threshold that accounts for that gap.

Why a floor price exists

Income Factory analyses are based on end-of-day pricing data from Thursday. By Friday morning when you read the analysis, the live market has moved — sometimes by a little, sometimes by more. If the premium has moved below what the engine would have accepted for the trade, placing it anyway chases a trade that no longer meets the quality criteria.

The floor price answers the question: "Has the market moved enough to make this trade not worth taking?" If yes, the analysis still contains useful context (the suggested strike and expiration are still valid ranges), but executing at the degraded price isn't in your interest.

How to use it

Step 1: Pull up the live options chain for the stock at your broker.

Step 2: Find the contract Income Factory specified — same strike, same expiration.

Step 3: Check the current market bid price (what buyers are offering) or the mid (midpoint between bid and ask).

Step 4: Compare to the floor price in the analysis.

  • At or above the floor: the trade is worth placing. Use a limit order at or near the mid.
  • Below the floor: skip it. A below-floor trade isn't worth taking — the live market has moved enough that executing no longer reflects the engine's analysis. The analysis will repeat next Friday if conditions remain favorable.

What the floor price is not

The floor price is not a target. It's a minimum. If the live market is offering more than the floor, collect what the market offers — you don't need to limit yourself to the floor.

The floor price is also not a guarantee. It's the engine's assessment, based on the strategy level you've chosen, of the minimum premium worth accepting for the assignment risk that contract carries. Executing above the floor means the trade met the bar; it doesn't mean the trade will play out in any particular way.

Common follow-up questions

What if the market is moving fast and I can't tell if I'm above or below the floor?

Use a limit order at your target price. If it fills, you got the price you wanted. If it doesn't fill within a few minutes, the market moved away from you — cancel and reassess. There is no penalty for an unfilled order.

The floor seems low compared to what the analysis showed. Is something wrong?

Not necessarily. Bid-ask spreads on options widen and tighten throughout the day. The mid at trade time may be below the Thursday close price if market conditions shifted overnight. If the mid is still above the floor, the trade is fine. If it's below, skip it.

Can I negotiate a price between the bid and ask?

Yes. Options orders are typically placed as limit orders somewhere between the bid and ask. The floor price is your lower bound; the ask is the upper bound on what you'd expect to pay. Somewhere in the middle is where most orders fill.

What happens if I skip a trade because the premium dropped?

Nothing. Income Factory will generate a fresh analysis for that position next Friday. Skipping a trade you don't like is part of how the system works — the engine skips weeks too, and your skipping is no different.

This is educational content, not investment advice. Covered calls involve risk of assignment and loss of upside appreciation.