A premium seller's numbers confuse almost everyone at first, because the obvious one — Net Liq — is the wrong scoreboard. Drag the sliders below and watch how time quietly turns the premium you collected into income you've earned.
You sold a put and collected the premium set above. Now drag the day forward. The smooth gold line is what you've actually earned so far (theta at work). The jagged blue line is your Net Liq change — that same income plus whatever the market did. Same account. Watch how differently they move.
Time always pays you a small, steady bit. The market is the big, random force — and it cuts both ways. Drag how far the market moves today and watch the paycheck flip red. Two forces, every single day.
You bought long-put protection — your permanent safety net. Each calm week your roll banks a credit. Drag the weeks forward and watch those credits first buy back the protection's cost, then turn into free income with the protection still owned. (Set the amounts up top.)
Using this with others: drag slowly and narrate. Panel 1 makes the point that time earns, the market just wanders — so watch the gold line, not the blue one. Panel 2 makes the point that the engine pays for its own protection, then runs free. Numbers here are illustrative round figures for teaching, not a forecast or a return claim.