⚡ In This Issue: A Market That Just Got Real

Volatility has returned with a vengeance, and with it—the premium, the panic, and the edge.

What began as a controlled rotation away from tech quickly spiraled into a full-blown de-risking event. SPY dropped nearly 10% on the week. Nvidia, Apple, and Tesla each fell double digits. The trigger? An escalation in the U.S.–China trade war. But the message from markets was louder: the air is thin, leadership is exhausted, and buyers have stepped aside.

This wasn’t sector churn. It was repricing. Breadth collapsed. Liquidity thinned. The VIX closed above 45—its highest mark since the early days of 2020. For options traders, this marks a regime shift. We’re no longer navigating a low-volatility drift. We’re in a premium-rich, headline-driven market where structure and discipline—not conviction—separate winners from whipsaws.

The signs are everywhere: extreme skew in front-month options, sky-high IV percentiles across major indices and high-beta names, and put/call ratios rarely seen outside of crises. Yet beneath the surface lies a core truth that sophisticated options traders recognize: when fear gets overpriced, probability sellers thrive.

This week, we break down the volatility math, the mispriced assumptions, and the edge that comes when the crowd starts hedging reflexively. You’ll find:

• High-conviction premium-selling opportunities in oversold, volatility-rich ETFs.

• A breakdown of skew and implied move dislocations offering contrarian setups.

• A strategic deep dive into why cash-secured puts are outperforming blind stock buying in this kind of market.

• And a reminder that the game isn’t about prediction. It’s about being paid to wait.

There’s panic in the headlines—but structure in the data. This is the environment we’ve trained for.

Let’s get to it.

🚀 The Wait Is Over: The Option Premium Is Evolving

This isn’t something I’ve rushed. It’s something I’ve lived.

I’m launching three all-new services under The Option Premium—each shaped by 23+ years in the options trenches as a professional trader.

These aren’t strategies built in backtests. They’ve been used, adapted, and refined through real markets, real drawdowns, and real trades.

One is for income. One for growth. One for high-probability edge. All built on a mechanical, statistically grounded, and highly disciplined risk management approach.

For those who’ve asked about saving a spot—I’ll be reaching out shortly with an early look.

Stay tuned.

📈 Market Snapshot & Commentary

📈 Market Snapshot & Commentary (Week Ending April 4, 2025)

🔹 SPY Sheds Nearly 10% as Trade War Escalates

Markets took a beating this week, with SPY closing at $505.28, down nearly 10% from Monday’s open. What started as sector rotation turned into a broad de-risking event as China retaliated against U.S. tariffs. Volume surged, liquidity thinned, and even defensive sectors couldn’t catch a bid.

This wasn’t your average pullback—it was a re-pricing of risk. And traders noticed. Mega-caps led the way down, with NVDA, AAPL, and TSLA each losing more than 10%. The selling was indiscriminate.

🔹 Volatility Reawakens: VIX Closes at 45.31

The VIX spiked to 45.31 by Friday’s close—its highest level since 2020. That’s not just a warning flare; it’s a regime change. We’re officially out of the low-volatility grind and into a fast-moving, premium-rich environment where options sellers must adapt or get run over.

🔹 Breadth & Sentiment: Everyone's Hedging, Few Are Buying

SPY's put/call ratio closed at 2.06, a rare level that signals heavy demand for downside protection. Meanwhile, breadth collapsed—fewer than 20% of S&P stocks finished above their 50-day moving average. The market’s leadership has thinned dramatically, and correlations have dropped to levels that often precede bear market cycles.

🔹 Inside the Implied Truth: Extremes Worth Watching

This week’s Implied Truth data revealed some of the most stretched setups we’ve seen in over a year:

• Implied Volatility Percentiles >90 in SPY, QQQ, and high-beta names like AMD, TSLA, and META. These are historically elevated, offering juicy premium but demanding tighter risk control.

• RSI levels sub-30 in dozens of quality names, setting up classic “get paid to be patient” trades using cash-secured puts.

• Negative skew in front-month options across multiple ETFs—traders are paying up for downside protection, while upside vol remains cheap. That’s a potential edge for structured neutral or contrarian plays like iron condors or ratio spreads.

Bottom line: we’re in rare air. You’re getting the chance to sell premium at levels we haven’t seen since the early days of 2022—and in many cases, while targeting fundamentally sound names near long-term support.

🧠 Final Word for Options Traders

This is not the time to blindly fade fear—but it is the time to lean into structure and get paid to wait.

• Prioritize high-IV, high-conviction setups.

• Consider scaling into trades with tiered cash-secured put entries.

• Favor 21–45 DTE expirations for max flexibility and theta decay.

• Stick to defined-risk spreads in fast-movers.

• Use RSI extremes and elevated IV percentiles as your signal—not the headlines.

If you’re looking for actionable tickers with an edge, our Implied Truth section has the week’s most attractive setups—with the best high-probability premium-rich ETF plays.

🔹 Market Meter:

📜 Investment Quote of the Week

Volatility has always carried a negative connotation. When most people hear the word, they think of uncertainty, risk, or even danger. It’s what investors blame when their portfolios draw down. It’s the villain in every major market headline.

But for options traders—especially those who know how to structure risk—it’s quite the opposite.

Volatility is where the opportunity lives. In fact, if you understand how options are priced, you’ll come to see that volatility isn’t the price you pay—it’s the price you’re paid.

The Hidden Language of Volatility

Volatility isn’t just chaos—it’s information.

Implied volatility (IV) is how the options market communicates fear, uncertainty, and expected movement. It’s baked into the premium of every option you trade. When markets get nervous—during earnings announcements, Fed meetings, or geopolitical shocks—IV rises.

As a result, option premiums increase. This means traders and investors are willing to pay more for protection or speculative exposure.

And that’s where the opportunity begins.

When Fear Gets Overpriced

Let’s say a stock is set to report earnings, and IV spikes into the 90th percentile. The options market is pricing in a 9% move. But historically, that same stock only moves 3–4% post-earnings.

What happened?

The market overpaid for uncertainty.

As a trader selling premium—via defined-risk strategies like iron condors or vertical spreads—you can structure a trade that benefits from the market doing less than expected. No need to predict direction. No need to guess whether the number beats or misses. All that matters is that the realized move comes in smaller than the implied move.

This gap between expectation and reality is where options traders build edge. And when volatility is high, that edge becomes even more pronounced.

Turning Volatility Into a Repeatable System

Trading high-volatility environments isn’t about being bold—it’s about being structured. Professionals don’t guess. They prepare. They use data and risk-defined strategies to consistently take advantage of volatility mispricing.

Here’s how we do it:

1. Use Risk-Defined Strategies

During periods of elevated IV, trades like iron condors, credit spreads, and jade lizards shine. These setups cap downside while allowing you to harvest rich premium—especially when IV is overstating the likely move.

2. Filter Using IV Percentile

Not all high volatility is truly high. Tools like IV rank and IV percentile help identify when current implied volatility is elevated relative to its history. When IV percentile is above 70%, it often signals that options are overpriced—and that selling premium may offer favorable odds.

3. Pay Attention to Skew

Skew tells you which side of the options chain is overpriced. Is there more fear on the downside? Are call buyers driving up the right tail? Smart traders adjust their strikes and deltas accordingly. We don’t fight skew—we align with it.

4. Adjust Position Sizing

In high-IV environments, small goes a long way. You don’t need to oversize to generate strong returns. In fact, the biggest risk in volatile markets isn’t the trade—it’s the temptation to trade too big.

The Real Edge: Discipline Over Prediction

The key insight is this: Volatility is the market saying, “I don’t know what comes next.”

You don’t need to know either. You just need to structure trades that take advantage of that uncertainty being mispriced.

Volatility opens a window. It offers wider breakevens, higher premiums, and better reward-to-risk profiles—if you understand how to interpret and act on what the market is pricing in.

That’s the real edge.

Final Thoughts

Peter Bernstein was right: opportunity isn’t free. It comes at a cost. And in options trading, that cost is volatility. But with the right tools, a disciplined process, and a clear framework, volatility transforms from a source of fear into a source of income.

It’s not just the cost of opportunity—it’s what you’re paid for.

While others fear the storm, we structure for it. While others panic, we stay mechanical. While others overreact, we stay patient and get paid to wait. That’s the difference between trading emotionally and trading like a professional.

And that’s the foundation of everything we teach at The Option Premium.

📰 Weekly In-Depth Articles 

🗓️ Tuesday, April 1st: How to Use Delta When Selling Puts: Targeting the Right Strike Price Like a Pro

🗓️ Thursday, April 3rd: The Daily Options Trader Checklist: A Proven Framework for High-Probability Trades

📊 Weekly Table Overview: The Implied Truth

We’ve now reached what’s quickly become the most read (and requested) section of The Option Premium. If you ever have questions or want to dig deeper, feel free to reach out — I’m always happy to help.

You're looking at one of the rarest and most actionable datasets we ever get as options traders—a moment when nearly the entire market is simultaneously:

1. Oversold on multiple RSI timeframes

2. Loaded with extreme IV Rank and IV Percentile

3. Experiencing put-skew across the board (elevated put/call ratios)

4. Trading near multi-week/month lows (look at those High/Low graphs)

If there’s one theme defining this week’s volatility landscape, it’s this: markets are now pricing in peak pessimism across nearly every asset class. With nearly every major index ETF posting RSI(2) readings under 5 — and IV Ranks breaking through prior 52-week highs — this is a moment of extreme opportunity and extreme discipline for premium sellers.

Let’s break this down into the themes and strategic edges that matter most right now.

1. 🟩 Where Premium Sellers Should Be Looking

(IV Rank > 50 = Rich Premiums)

When implied volatility ranks spike, options premiums inflate. These are the top setups this week:

→ XLI (Industrials)
IV Rank: 186.0 | RSI(2): 3.9
A high-volatility spike meets oversold momentum. Iron condors or bull put spreads are well-supported here.

→ XLF (Financials)
IV Rank: 175.0 | RSI(2): 2.9
Bank sector panic = inflated puts. Ideal for defined-risk short put spreads below recent support.

→ RSP (Equal Weight S&P 500)
IV Rank: 138.3 | RSI(2): 3.4
Market-wide stress, but potentially overdone. Great for iron condors or bull put spreads on this index proxy.

→ DIA (Dow Jones)
IV Rank: 146.1 | RSI(2): 2.8
Even the Dow is breaking down. Volatility spike and near-historic RSI lows. Smart sellers step in here.

→ SPY (S&P 500)
IV Rank: 129.3 | RSI(2): 2.9
Fear is priced in. Use short puts or credit spreads for reversion setups.

📌 Takeaway: These are high-conviction setups. Sell premium with defined risk, short duration, and margin awareness.

2. 📉 RSI Extremes: When Momentum Overreacts

(RSI(2), RSI(7), RSI(14) aligned = High-Probability, Short to Intermediate-Term, Mean-Reversion Snapbacks)

→ EFA (Intl Developed Mkts)
RSI(2): 1.1 | IV Rank: 70.9
Oversold and still falling. Great setup for bull put spreads or cash-secured puts.

→ EEM (Emerging Markets)
RSI(2): 1.3 | IV Rank: 101.1
Sentiment is washed out. Elevated IV makes premium selling attractive.

→ SMH (Semiconductors)
RSI(2): 2.2 | IV Rank: 122.9
Perfect storm for sellers: high vol + sharp downside momentum.

→ QQQ (Nasdaq 100)
RSI(2): 3.2 | IV Rank: 105.9
Institutional fear + retail panic = ideal credit spread conditions.

→ IWM (Russell 2000)
RSI(2): 5.0 | IV Rank: 120.5
Small caps are shaking. Time to lean into reversion with risk-controlled credit spreads.

📌 Takeaway: This is how you sell fear. Don’t overstay — take profits as RSI rebounds.

3. 🌪 VIX & Market Volatility

→ VIX
Level: 45.31 | IV Rank: 60.9 | RSI(7): 91.6
This is real fear. The VIX is in the danger zone — premiums are pumped across all indices.

📌 For experienced sellers: it’s a buffet. For newer traders: stick to highly-liquid ETFs, short duration, defined-risk trades.

4. 🧠 The Hidden Edge – Unusual Combos Worth Watching

→ XOP (Oil & Gas)
RSI(2): 2.4 | IV Rank: 173.4
Massive vol spike + crash. Tight put spreads or reversals could work — handle with care.

→ FXI (China Large-Caps)
RSI(2): 0.2 | IV Rank: 36.4
Lowest RSI(2) in the list. Tight bull put spreads or skewed iron condors are reasonable approaches.

→ URA (Uranium)
RSI(2): 2.1 | IV Rank: 86.4
Thinly traded than most of the other ETFs we follow, but premiums are elevated. Calendar spreads or condors could work.

→ IBIT (Bitcoin ETF)
RSI(2): 51.3 | IV Rank: 73.4
Volatile, but neutral. Condors or diagonals make sense here.

📌 Takeaway: These are asymmetric plays. Look for vol + RSI convergence for entry.

5. ✅ Final Signals from The Implied Truth

💰 Top Premium-Selling Setups
→ DIA, RSP, XLI, XLF, SPY, QQQ
Use defined-risk credit spreads or iron condors.

📉 Oversold Reversal Candidates
→ EEM, EFA, SMH, IWM
Pair extreme RSI with high IV for short-duration gains.

🎯 Volatility Watchlist
→ VIX, FXI, URA, XOP
Monitor for setups as fear accelerates or fades.

⚠️ Avoid for Now
→ TLT, IEF, GLD
Overbought with soft IV = not worth the risk.

📊 Quick Reference: The Implied Truth Table

• Symbol: ETF ticker (e.g., SPY, QQQ, IWM).

• Last: Latest closing price.

• P/C Ratio: Put/Call ratio—>1 = bearish, <1 = bullish; extremes can signal contrarian setups.

• Impl Vol: Implied Volatility—higher IV = richer premiums, more expected movement.

• IV Rank: IV vs. past year’s range—0% = lowest, 100% = highest; >35% favors premium-selling.

• IV Percentile: % of time IV was below current level—adds context to IV Rank for volatility shifts.

• RSI (2/7/14): Momentum indicator—>80 = overbought, <20 = oversold; shorter RSIs react faster.

• High/Low Graph: Shows price vs. 52-week range—+% = near highs, -% = near lows.

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

📚 Educational Corner: Options Deep Dive

🎓 Topic of the Week: This Week’s Deep Dive is Too Big for Email (But Too Good to Miss)

We got a great question from a longtime subscriber this week: “With all this volatility, is now the time to sell cash-secured puts? And how do you choose the right strike and expiration?”

It’s a perfect question for this kind of market.

Volatility like this creates plenty of long-term buying opportunities… if you know how to take advantage of them. And that’s where cash-secured puts shine.

Instead of blindly buying shares, you can use cash-secured puts to get paid to wait for better prices on the stocks you already want to own — all while managing risk and improving your cost basis. It’s one of the most disciplined, flexible ways to build long-term positions in a chaotic market.

If you’ve been thinking “today might be a good day to buy some long-term shares,” this might be an even better day to sell puts instead.

So I put together a full breakdown: how cash-secured puts work, why they’re especially powerful in volatile markets, and how to use them to get paid now to buy stocks you already want — at the price of your choosing.

If you’ve been looking for a smarter way to build stock positions in this environment, this is the strategy I come back to again and again.

👉 Read the full Deep Dive here on the website.

🔗  Let’s Stay Connected

Have questions, feedback, or just want to say hello? I’d love to hear from you.
📩 Email me anytime at [email protected]

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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