📩 The Option Premium Weekly Issue - August 31, 2025

Most options traders fail not because they don’t understand the mechanics, but because they let impatience dictate their decisions. They chase premium, they crowd into trades without an edge, and they confuse activity with progress. That’s not what we do here. My approach has always been built on discipline, probabilities, and the law of large numbers. We don’t need lottery tickets or 200% screenshots to prove a point, our proof comes from stacking small, high-probability wins until they compound into something meaningful. That’s how professionals trade, and it’s why I’ve built The Option Premium to be a place where traders learn to think in terms of process, not predictions.

That’s also why cash is a position. Knowing when to sit out, when to wait for implied volatility to expand, and when the odds are finally in our favor is just as important as placing a trade. Every issue of this newsletter is designed to show you that mindset in practice, real trades, real probabilities, and real explanations of why they fit within a larger portfolio. If you’re looking for a straightforward, no-nonsense approach to options income that respects your intelligence and your capital, you’re in the right place.

👉 If this disciplined, probability-based approach resonates with you, consider taking the next step by joining one of my premium services inside The Option Premium. Each service is designed to complement the others, working together as a full portfolio solution. The Income Foundation focuses on steady income through the Wheel and cash-secured puts. Wealth Without Shares uses capital-efficient Poor Man’s Covered Calls to layer in long-term growth and income without tying up cash. The Implied Perspective rounds it out by targeting higher-probability volatility trades, iron condors, credit spreads, and hedges, that protect and balance the overall portfolio.

When combined, these services aren’t just strategies in isolation, they’re pieces of a bigger framework. Each one plays a role: long deltas from PMCCs, steady premium from the Wheel, and risk-defined spreads to hedge when markets overextend. That’s what makes this different from anything else you’ll find, our services are built to reinforce one another, just as a professional portfolio would. Choose the service that fits your starting point, knowing that they’re designed to work in harmony as your trading evolves.

Thanks for being a part of the The Option Premium community. I truly appreciate your ongoing support.

Andy

📉 Market Snapshot and Commentary

Summer Sizzles, But Seasonality and Sentiment Say: Stay Alert

Stocks ended the final week of August flat, a quiet cap to a summer that delivered four straight months of gains. But don’t mistake quiet for calm. Underneath the surface, momentum remains red-hot in certain areas, while broader indicators suggest we’re entering a season known for cooler heads and choppier waters.

From an options perspective, it’s a time to stay strategic: implied volatility remains low, premium is tight, and overbought signals continue to flash across major indices and sectors. The setup demands patience, not prediction.

🧠 Three Things That Matter for Options Traders This Week:

1. NVIDIA Didn't Miss - It Just Couldn't Wow

AI remains the engine driving this market higher. But last week, NVIDIA reminded traders that even stellar earnings (+56% YoY revenue growth) can’t always meet sky-high expectations. Despite strong results, the muted price action tells us plenty: when sentiment is stretched, even a good story needs a breather.

➡️ Options angle: When reactions underwhelm despite beats, it's a clue that volatility is compressing and expectations are too rich. This is prime territory for contrarian premium sellers, particularly in mega-cap tech, where IV Rank has quietly faded.

2. Fed Cut Odds Climb - But The Data's Mixed

After Powell’s Jackson Hole speech and a tame PCE print, markets now price in an 85% chance of a rate cut at the September meeting. Small-caps and cyclical names jumped on this narrative, helping equal-weighted indexes outperform. Yet, the Fed still walks a fine line between falling inflation and a softening labor market.

➡️ Options angle: This rotation into rate-sensitive stocks may offer new premium-selling setups, especially in sectors like financials, industrials, and small-cap value, where IV and RSI have room to move.

3. Seasonal Shifts: September Is Rarely Smooth

It’s no secret: September and October are historically the most volatile months of the year. With the S&P 500 up 30% since April and few pullbacks along the way, the odds of a short-term shakeout are rising. That doesn’t mean we run for the exits, it means we prepare.

➡️ Options angle: Time to widen wings, ladder expirations, and consider smaller position sizes if you’re trading iron condors, strangles, or credit spreads. The best edge in premium selling comes when others start getting emotional.

🧮 Weekly Market Stats

📰 Weekly In-Depth Articles 

🗓️ Tuesday, August 26th - How to Use Cash-Secured Puts on IBIT to Buy Bitcoin at a Discount, and Get Paid While You Wait

🗓️ Thursday, August 28th - Building Durable Options Strategies: How I Navigate Low-Volatility Periods

🎓 Options 101: The First Steps to Trading

This week’s issue of The Option Premium highlights one of the most dependable strategies in professional options trading: the cash-secured put (CSP). Rather than chasing speculation, CSPs let you name your price, set aside the cash, and collect income while you wait.

Using DraftKings (DKNG) as an example, we show how CSPs create two favorable outcomes: steady income if the option expires, or stock ownership at a discount if assigned. Along the way, we break down why assignment is part of the plan, how premium lowers cost basis, and why CSPs are a foundation for the Wheel Strategy.

Takeaway: Cash-secured puts are about consistency, discipline, and probabilities, not predictions.

👉 Read the full article to see how professionals use cash-secured puts to generate income and acquire stocks at a discount.

🧠 Mental Capital

Train not just your trading system, but your trading self.

The Art of Strategic Inaction

The hardest part of trading isn’t always managing losses or volatility swings, it’s having the discipline to do nothing when the edge isn’t there.

This week’s lesson breaks down why restraint is an active skill, not a passive one. With the VIX hovering near 15 and implied volatility scraping lows, premium sellers face thin cushions and poor risk/reward. In these environments, cash isn’t idle, it’s a position, a survival tool, and dry powder for when opportunity returns.

Inside this edition:
✔️ Why patience protects both financial and mental capital
✔️ How low IV environments punish forced trades
✔️ Why “cash is a position” is more than a cliché, it’s an edge
✔️ A framework for waiting: IV Rank, expected move, breadth measures, and defined thresholds

Restraint may not look like trading, but it often delivers the best long-term results. Sometimes the most profitable trade is the one you don’t make.

👉 Read the full article at The Option Premium

📊 The Implied Truth: Weekly Table Overview

Unlock the Full Picture – Upgrade to access the complete table, including all 100 equities (AAPL, META, AMZN, NVDA and more)

Every number tells a story. Each week, we decode the landscape across the most liquid ETFs, because this is where retail traders get the cleanest signals and the least slippage.

But the power isn’t in the data, it’s in how you interpret it.

Below is your edge: a strategic overview that reveals where the premium is overpriced, where price action is exhausted, and where the highest-probability setups exist for the coming week.

This section is here to help you choose what works for your strategy. The numbers are facts, not opinions. Whether you sell premium, buy directional spreads, or trade reversals, the edge begins with understanding volatility and momentum. Let’s dig in.

What This Table Tells Us

• Use this weekly to guide your trade ideas, not predict outcomes.

• The data is factual. There’s no opinion in this grid, only opportunity.

• Choose what aligns with your timeframe, risk appetite, and edge.

🌐 Macro Snapshot

The market is shifting from broad strength to choppy fragmentation. Major indices are cooling off, volatility is stirring, and sector extremes are beginning to flash opportunity.

📊 Indices & Breadth

• SPY, DIA, QQQ, VTI → mid-range RSI (50-60), no longer overbought but not oversold → momentum cooling.

• Breadth measures steady but stalling → rotation more likely than a broad surge.

⚡ Volatility Signals

• VIX: 16.4 (IV Rank ~50%) → hedging demand building beneath the surface.

• UVXY, YINN → elevated implieds vs. history → volatility buyers leaning in.

🥇 Metals & Commodities

• GLD: RSI(2) 87, IV Rank 56% → extended + premium-rich.

• GDX, GDXJ, SLV → clustered overbought signals with IV Ranks 40-50%.

• Energy rolling over:

  • XLE RSI(2) 9.6 → short-term washed out.

  • XOP, USO → softening momentum after strong runs.

🌍 International & EM

• EWZ (Brazil): RSI 85, IV Rank 37% → overbought.

• EWW (Mexico): IV Rank ~50% with neutral RSI → dislocation worth tracking.

• China proxies (FXI, KWEB, ASHR): elevated IV with mid-range RSI → choppy backdrop.

🎯 Top 3 Opportunities This Week

🧮 1. GLD - Gold ETF

• Why: RSI(2) at 87 + IV Rank 56% → extended and premium-rich.

• Takeaway: Historically one of the best mean-reversion setups when metals get this stretched.

🧮 2. URA - Uranium ETF

• Why: IV Rank ~70%, RSI mixed → rare high-premium + active price action combo.

• Takeaway: Options are expensive, giving sellers edge in a volatile but tradable range.

🧮 3. XLE - Energy Select Sector

• Why: RSI(2) 9.6 → deeply oversold. IV moderate at 18%.

• Takeaway: Energy washed out short-term, historically quick to mean-revert.

🚨 Key Risks Ahead

• Volatility repricing higher: VIX climbing from extreme lows → sudden spikes possible.

• Commodity whipsaws: Metals extended and energy washed out → both prone to sharp reversals.

• Breadth stalling: Leadership rotation instead of broad rally could add chop across indices.

✅ Weekly Takeaway

This isn’t an “all-clear” environment. The smarter play is to fade extremes, respect volatility, and lean on premium where the market is overpaying.

Quick Reference: The Implied Truth Table

📚 Educational Corner: Options Deep Dive

The Ratio Poor Man’s Covered Call - Using Multiple LEAPS for Smarter Options Income

Most traders think of the Poor Man’s Covered Call (PMCC) as a one-to-one strategy: buy one LEAPS call, sell one short call, collect income. But strategies don’t need to live in rigid boxes. This week’s article explores how adjusting the ratio, holding multiple LEAPS against fewer short calls, or occasionally none, can transform the PMCC into a flexible tool that adapts to market conditions.

A ratio PMCC lets you tilt between growth and income:

• Two LEAPS, one short call → lean bullish while still generating premium.

• Classic one-to-one → steady income with capped upside.

• LEAPS only, no short call → optionality and patience when trends deserve room to run.

The real edge comes from knowing when to adjust. Ratio PMCCs shine in bullish trends, moderate volatility, or when balancing an income-heavy portfolio. Instead of being locked into a formula, you can shape the PMCC to fit your outlook, portfolio, and mental capital.

👉 Read the full article to see practical trade examples and how we use ratio PMCCs inside The Option Premium portfolios.

🔗 Let’s Stay Connected

Have questions, feedback, or just want to say hello? I’d love to hear from you.
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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