“Volatility is not something to fear. It is a friend that shows where the opportunities lie.” — John W. Henry

Markets rallied hard last week—but not because uncertainty disappeared. It simply changed shape.

The S&P 500 surged nearly 6%, logging one of its strongest weekly gains in years, after the White House announced a 90-day pause on its proposed tariff increases for most countries. The move signaled a shift—from confrontation to negotiation—and opened the door to a possible cooling of trade tensions. That said, China remains the outlier, and so does investor anxiety. The core issues haven't been resolved. They’ve just been deferred.

For options traders, the signal isn’t in the headlines—it’s in the volatility.

The VIX spiked to 52 last week—territory reached only a handful of times in the past three decades, almost always during periods of extreme pessimism. Historically, such levels tend to mark capitulation, not the start of further chaos. It’s not that volatility instantly disappears—but it becomes priced in. And that distinction matters.

When implied volatility is stretched this far, options are expensive across the board. The market is essentially betting that something big is coming—but the size and direction of that move are increasingly uncertain. That’s when the advantage tilts toward short premium traders who understand structure and probabilities.

We're now operating in an environment where the edge comes from staying mechanical while others react emotionally. Intraday swings have widened to 5%–7%, more than five times their historical average. Skew has steepened. Put/call ratios have spiked. But instead of chasing the move, smart traders are doing something different: they’re stepping back, sizing down, and selling fear in defined, controlled ways.

This is where credit spreads, iron condors, diagonals, and cash-secured puts shine—not because they’re aggressive, but because they’re measured. These strategies are built to profit not from predicting direction, but from selling volatility that’s overpriced, often by a wide margin. And with implied volatilities in the 90th percentile or higher across major indices, there’s no shortage of that opportunity right now.

To be clear: this isn’t about “buying the dip.” It’s about recognizing when the market has overcorrected on fear—and using strategies that get paid even if the market does nothing or just wobbles around.

Volatility hasn’t gone away. But in many ways, that’s exactly the point. For options traders with a plan, this is one of the richest environments in years to be getting paid for risk—as long as that risk is defined and deliberate.

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This moment has been a long time in the making, and I’m truly excited for what’s ahead. I want to sincerely thank all of you for the continued support—especially those who’ve been with me for over a decade. Your trust means the world to me.

It feels incredibly rewarding to finally run my own newsletter, on my own terms, without having to answer to anyone else. This is just the beginning.

🔹 Market Meter:

Even with the best strategies and indicators at your fingertips, one of the biggest challenges in trading volatility spikes is controlling your emotions. After all, volatility spikes usually coincide with scary market news and potential losses in your portfolio. The human mind is prone to panic and herd behavior – which is exactly why these opportunities exist (because many people are panicking, creating mispricing). To seize the gift of volatility spikes, you must cultivate a mindset that is calmer and more rational than the average market participant in those moments. Here we draw on a bit of behavioral finance and wisdom from experienced traders (à la Jason Zweig’s lessons from past panics) to help you stay objective when fear dominates the market.

Stick to Data and Probabilities: Emotions are compelling but data is grounding. This is where those volatility metrics and trade checklists come into play. When fear is high, instead of focusing on scary headlines or your portfolio’s unrealized losses, focus on concrete numbers: IV percentile is 95% – that means this is one of the most volatile periods in recent memory. This put spread has an 85% probability of expiring worthless according to delta – those are pretty good odds. By reframing in terms of odds and expected value, you can detach from the heat of the moment. It’s the difference between saying “Oh no, what if the market crashes further and I lose money?” versus “I have a statistically favorable bet that, more often than not, will win because the odds are in my favor.” Options trading is a probability game, and volatility spikes often skew the probabilities toward sellers. Let that objective truth guide you, not the adrenaline of the day’s news.

Understand the Emotional Cycle: Markets are cyclical in sentiment – euphoria and complacency lead to greed (low volatility, cheap options), whereas panic and despair lead to fear (high volatility, expensive options). As an options seller, you are almost acting like a psychologist or behavioral economist: you’re effectively betting that people’s fears are overshooting reality. It helps to step back and literally note what stage of the cycle we might be in. Is everyone talking about the sky falling? Are news headlines extremely negative? Often by the time volatility is extremely high, a lot of bad news is already priced in and people are extrapolating worst-case scenarios emotionally. Just recognizing this can give you the confidence to go against the grain.

Use Defined-Risk Structures if Nervous: If the thought of selling naked options during a crash makes your heart race, there’s nothing wrong with sticking to defined-risk plays (spreads). As we discussed, strategies like bull put spreads or iron condors have built-in worst-case limits. Knowing your maximum loss from the outset can help alleviate the psychological fear of an “unlimited” disaster. It’s easier to stay calm when you know, “Okay, if I’m completely wrong, the most I lose is $X, which I can handle.” That can prevent you from bailing out of a good trade at the worst time just because you panic.

Recall Historical Precedents: In the thick of a crisis, it often feels like “this time is different” and the market will never recover. A helpful exercise is to recall or study past panics (like we did earlier) to remind yourself that rebound and mean reversion are the norm, not the exception. Investors in every era believed the world was ending – whether in 1929, 1987, 2008, or 2020 – yet markets found a way through. This isn’t to say blindly that every crisis will quickly resolve, but it provides perspective. For example, knowing that in 2008 the VIX hit 80 and eventually normalized, or that in 2020 the market came back far sooner than predicted, can bolster your resolve that the current panic likely also will pass in time. Even the dot-com bust, which was prolonged, eventually turned, and volatility came way down. Having that mental catalog of “we’ve been here before and those who kept calm benefited” is powerful. It’s the psychological equivalent of having a life jacket – it helps you float above the waves of emotion.

Small Size = Small Worries: One very practical behavioral tool is to reduce position size when volatility is crazy. If a normal trade for you is risking 2% of your capital, maybe risk 1% or 0.5% during a volatility spike. Why? Because even though the expected value is great, the ride will be bumpy. Smaller size means even a worst-case loss won’t significantly harm you. This does wonders for your ability to think clearly. It’s much easier to sell a put on a crashing stock if you’re only doing one contract and know that even if assigned, it’s well within your financial capacity to buy those shares. With smaller positions, you won’t be as tempted to hit the eject button at the first sign of trouble, and you’ll be more likely to let the probabilities play out in your favor. Scaling down in stormy weather is just prudent – airlines tell planes to carry less cargo in turbulence, similarly, carry a bit less risk.

Pre-Plan Your Actions: In calm times (or before entering a trade), write down your plan for different scenarios. For instance: “If volatility goes higher after I sell (market keeps dropping), I plan to add another spread at an even wider margin” or “If my position goes against me by X, I will cut loss without second-guessing.” During the heat of the moment, fear can cloud judgment and cause indecision or rash decisions. A predetermined plan acts as your rational voice from the past. For example, you might decide ahead: “I’ll sell this iron condor. If the index breaches my short put strike, I’ll immediately close the put side and let the call side run.” When that breach happens, you’ll still feel the adrenaline, but you can follow your script rather than making a panicked, impulsive choice. Essentially, make decisions when you are rational to execute when you are emotional.

Accept the Unknown: Part of staying sane in volatility is accepting that you cannot pick the bottom or predict the exact turning point. You will never have perfect information amid chaos. So, you enter trades knowing you might endure some heat or that things could get worse before better. By accepting that and focusing on process, probabilities and the law of large numbers (e.g., scaling in, multiple entries, prob. OTM, prob. touch), you won’t panic at every new low. Some of the best premium sellers actually hope for the opportunity to sell more if volatility gets even more extreme – they keep some powder dry to take advantage. That mindset (“I wouldn’t mind if it drops further, I’ll sell more at even juicier premiums”) is the opposite of the typical investor’s mindset and can really only come if you have planned and sized such that a further drop doesn’t cripple you but rather gives you more opportunities.

Community and Mentors: Often following a community can help reinforce rational behavior. Hearing that others are successfully executing the plan and not panicking can be a calming factor. It’s akin to having a pilot’s voice over the intercom during turbulence saying “Folks, we’ve hit some rough air, but we’ve seen this before and it should pass shortly. Nothing to worry about.” That reassurance keeps passengers from freaking out. Similarly, reading commentary from other seasoned options traders during a spike can remind you, “Yes, this is the time to do these trades. Stick with it.” So don’t isolate yourself; soak in the wisdom of those who have weathered many volatility storms. This is exactly what I’m trying to create at The Option Premium.

Know Thyself: Finally, be honest with yourself about your risk tolerance. Not everyone is psychologically equipped to sell options naked in a free-fall or put on large credit spreads while CNBC or Bloomberg is blaring “Markets in Turmoil!” – and that’s okay. If you find you truly can’t handle it, you can sit out the worst days and perhaps enter once things are slightly less frenzied. Or use extremely defined and small trades. The opportunities will come again. The worst outcome for a trader is to take on a position they can’t mentally handle and then abandon it at the worst possible time (turning a high odds win into a realized loss because of panic-selling your position). Better to trade a size and style you can confidently execute, even if it means a bit less profit, than to go too big and sabotage yourself.

Staying objective during volatility isn’t just about discipline—it’s about executing a plan built on statistical edge and historical precedent. Emotions cloud judgment, but the data doesn’t lie. When implied volatility spikes, my focus shifts to probabilities, not panic. I trust my framework, I size appropriately, and I let the edge play out.

See premium, not panic.

🗓️ Tuesday, April 8th: Lessons from Past Panics: How Crises Created Option Selling Opportunities

🗓️ Thursday, April 10th: Earnings Season Options Strategy: How to Trade Expected Moves with High Probability Setups

Welcome to the most-read section of The Option Premium, where we break down the volatility landscape and help you translate market extremes into actionable trades. If any setup sparks questions or you want to explore strategy specifics, I’m just a message away. This section is built to be both insightful and accessible—with a quick-reference guide at the bottom to help you navigate the data and align it with your trading style.

Right now, we’re in one of the most favorable environments for premium sellers in recent memory. Oversold RSI levels, elevated IV ranks, and a flood of downside hedging have created a landscape defined by fear—and mispriced options. But for traders who lean on structure over speculation, this is a time to engage, not step back. Let’s walk through the high-probability opportunities this market offers, and how to position for them with confidence.

A volatility-forward view of the market’s most liquid ETFs—filtered through the lens of time decay, overextension, and opportunity.

Volatility is high. Markets are stretched. And theta is paying. These ETFs show elevated implied volatility and neutral RSI levels—perfect ground for non-directional trades.

💡 Strategy Tip: Use 30–45 DTE iron condors. Sell deltas near 15–20. Take profits at 50% max gain or if IV collapses post-catalyst.

These ETFs are flashing RSI(2) signals above 90 or below 10. High-probability reversion trades await.

Overbought (RSI 2 >90) – Prime for Bear Call Spreads or Short-term Condors:

Oversold (RSI 2 <10) – Watch for Bull Put Spreads or Diagonals:

⚙️ Strategy Tip: Use shorter DTE (14–21) spreads near earnings or rate events. Combine technical signals with IV Rank >70 for best edge.

High RSI, low or moderate IV? These setups often lead to disappointment for premium sellers. Avoid selling into strength unless IV rises.

⚠️ Warning: Don’t force trades. Overbought ≠ overpaying. If IV isn’t elevated, time decay doesn’t justify the risk.

📈 Insight: With SPY RSI(2) at 60.75 and IV Rank at 66.6, condors remain viable, but hedging tail risk via long puts or calendars is wise.

🔧 Optional Hedge: Consider VIX call spreads or SPY put diagonals as part of a portfolio-level volatility overlay.

These ETFs don’t neatly fit a category—but the combinations of vol, RSI, and position on their high/low chart are too compelling to ignore.

🎯 Watchlist Trades: Bearish GLD fly, Bull put in TLT, Short strangle in XOP, Iron condor in QQQ.

Use this to spot volatility trends, premium opportunities, and momentum shifts at a glance. 🚀

This week’s Options Deep Dive covers three straightforward, actionable trades—bull put spreads, wide iron condors, and deep out-of-the-money naked puts—that are perfect for today’s volatile market. With implied volatility pushing up options premiums, these strategies offer a chance to profit while managing risk. I include real-world examples with practical applications, so you can see exactly how these trades play out in today’s market conditions.

If you’re looking for simple, effective ways to take advantage of the current volatility, this is your opportunity.

👉 Read the full Deep Dive here on the website.

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Thanks again for reading. I hope you found today’s insights valuable and worth your time.

Trade Smart. Trade Thoughtfully.
Andy Crowder
Founder | Editor-in-Chief | Chief Options Strategist
The Option Premium