📩 The Option Premium Weekly Issue - February 15, 2026

Here's a number: 21.4%

That's our Small Dogs PMCC portfolio, year-to-date. Stack it on top of last year's 54.4% return. Compare it to the S&P 500, which has done essentially nothing in 2026.

Here's another number: 7%

That's All-Weather, designed for durability, not fireworks, quietly compounding while others chase.

These aren't screenshots from cherry-picked winners. They're complete portfolios, managed transparently, with every trade documented in real time.

February expiration is next week. If you want to understand how options income actually works, not the theory, the execution, now's the time to watch.

Start with Lazy Way strategies like Small Dogs and the All-Weather. Master the fundamentals. Then expand. That's the path.

One ask: I don't advertise. I don't have a marketing team. The only way The Option Premium reaches new traders is through people like you, people who've found value here and are willing to share it.

If you've learned something from this newsletter, if it's helped you think more clearly about risk and income, please spread the word. Forward it. Tweet it. Post it in your trading community, Reddit, Discord, or Facebook group. I pour everything I have into this, 24+ years of experience distilled into something I genuinely believe is the best options education available at any price.

Thank you. Genuinely.

Andy
Founder and Chief Options Strategist, The Option Premium

📰 Market Commentary: CPI Relief, AI Anxiety, and a Week That Tested Everyone's Patience

February's second week delivered exactly the kind of tape that separates disciplined traders from the rest: plenty of movement, plenty of headlines, and very little net progress on the major indexes.

By Friday's close (Feb 13), the numbers looked unremarkable…but those closing prices mask a violent week under the hood.

The AI Disruption Narrative Returns

Thursday delivered the week's gut punch. The S&P dropped 1.57%, the Nasdaq fell 2.03%, and the Dow shed nearly 670 points. The catalyst? Renewed fears about AI disruption, specifically, how rapidly evolving automation tools could hollow out entire business models.

Software stocks, logistics companies, even financial services firms saw aggressive selling as traders repriced disruption risk. Cisco plunged 12% after disappointing guidance. C.H. Robinson and RXO dropped over 20% each on news of AI-powered freight optimization tools.

This isn't the first AI anxiety episode, and it won't be the last. For premium sellers, the lesson is simple: sector-specific volatility spikes create opportunity. When fear concentrates in specific corners of the market, implied volatility in those names rises while index volatility stays relatively contained. That's where selective premium selling can find edge.

CPI Brings Relief, But Not Euphoria

Friday's Consumer Price Index report delivered what bulls were hoping for: headline CPI rose just 0.2% month-over-month (below the 0.3% consensus), with year-over-year inflation cooling to 2.4%, the lowest reading since May.

The market's reaction? A collective shrug. The S&P barely moved. The Nasdaq finished lower.

Why the muted response? Because traders had already pulled forward rate cut expectations earlier in the week following strong jobs data. The CPI print confirmed what was already priced in, it didn't accelerate anything. Fed funds futures still show two 25-basis-point cuts expected by year-end, with the first likely in June.

For options traders, the takeaway: Good inflation news is already in the price. The vol compression that typically follows benign data has largely already happened. We're back to stock-picking and sector rotation as the primary drivers.

The Great Rotation Continues

Here's the story nobody's talking about enough: small caps are crushing large caps in 2026.

The Russell 2000 is up roughly 8 to 10% year-to-date while the S&P 500 has gone essentially flat. Equal-weight S&P 500 is outperforming cap-weighted by a wide margin. The Dow, tilted toward value, hit record highs earlier this week.

What's driving it? Three forces:

1. Rate sensitivity: Small caps carry more floating-rate debt. Every rate cut expectation lifts their fortunes.

2. Valuation gap: The Russell 2000 was trading at a historic discount to the S&P 500. That gap is finally closing.

3. Domestic focus: Small caps derive 70 to 80% of revenue domestically. They're insulated from dollar strength and tariff noise.

This rotation matters for premium sellers because it's creating sector-specific opportunities. Regional banks, industrials, and domestic-focused companies are showing strength and elevated implied volatility. Our Small Dogs PMCC portfolio has captured this perfectly, 21.4% YTD performance reflects disciplined execution in exactly these pockets.

Rates and Oil: The Background Variables

10-year Treasury yield dropped to around 4.11% by Thursday, near two-month lows—as the risk-off trade sent money into safe havens. It bounced modestly on Friday following CPI.

WTI crude remains volatile, trading around $62 to 63/barrel. U.S.-Iran tensions continue to inject risk premium, but oversupply concerns and weak demand outlooks keep a lid on rallies.

What This Means for Premium Sellers

Let me be direct: this isn't a fat-pitch environment for index premium sellers.

SPY's IV Rank sits at roughly 21%. QQQ at 28%. You're not being paid generously to take index risk. The trades that work here are narrower: selling premium where IV Rank is elevated, respecting trends where ADX confirms conviction, and staying wider than feels comfortable when momentum indicators are stretched.

Our Implied Truth table (below) shows where the premiums are actually rich. Spoiler: it's not in SPY and QQQ. It's in metals, uranium, energy, homebuilders, and select sector plays.

The playbook stays boring on purpose:

• Sell premium where you're actually being paid (IV Rank > 40%)

• Respect strong trends (don't fight XLP, XLU, XLE when they're ripping)

• Keep index trades smaller and more structured when vol is thin

• Use next week's expiration as a natural forcing function, manage early

Plans beat opinions.

📅 Week Ahead: Key Economic Events (ET)

Markets are closed Monday, February 16 for Presidents' Day. When trading resumes Tuesday, the calendar is relatively light, but the data that does come will matter:

Trading Implication: The FOMC minutes on Wednesday could inject some volatility if traders parse any new signals about the pace of future cuts. But the bigger event for premium sellers is Friday's expiration. If you're running February positions, your management window is now.

📊 Weekly Market Stats

⁉️ Did You Know?

You Don't Have to Sell Calls Against Every LEAPS You Own

Most traders learn PMCCs as a 1:1 structure, one LEAPS call, one short call sold against it. Simple, clean, easy to manage.

But here's what the textbooks don't tell you: you can own more LEAPS than short calls.

Think about it. If you own 3 LEAPS on a stock you're genuinely bullish on, why cap all of them? Sell calls against 2, let the third run uncovered. You still collect premium, you still reduce cost basis, but you've given yourself uncapped upside on a portion of your position.

Why this matters: In a strong trending market (like we're seeing in small caps right now), capped positions leave money on the table. The standard PMCC works beautifully in sideways-to-moderately-bullish environments. But when your thesis plays out bigger than expected, that short call becomes an anchor.

The ratio approach:

• Own 3 LEAPS, sell 2 calls = 66% covered, 33% uncapped

• Own 2 LEAPS, sell 1 call = 50% income generation, 50% participation

You're essentially running a hybrid: part income strategy, part directional bet. The covered portion pays you to wait. The uncovered portion lets you win big if you're right.

The tradeoff: More LEAPS means more capital deployed and more theta decay on the uncovered positions. This isn't free money, it's a deliberate choice to accept some cost in exchange for unlimited upside potential on a portion of your book.

Use this when you have high conviction. Stick with 1:1 when you're neutral-to-bullish. Know which game you're playing.

🎓 Options 101: The First Steps to Trading

R-Multiples: The Number That Reveals Whether You're Actually Trading Well

You made $500 on one trade and $200 on another. Which was better? If you said the first one, you just exposed a blind spot that's costing you money. The $200 winner came from risking $100 (a 2R return). The $500 winner required risking $2,500 (a 0.2R return). The "smaller" winner was actually ten times more efficient.

R-multiples strip away the dopamine hit of big dollar wins and reveal what actually matters: how much you made relative to what you risked. This single metric, your average R across all trades, tells you more about your trading than any equity curve. It's how professional firms evaluate performance, and it's the foundation of every sustainable options income strategy. Once you start tracking R, you'll never look at your P&L the same way again.

👉 Read the full article: R-Multiples: The Universal Language of Trading Results

🧠 Mental Capital

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

The LEAPS Collar: How to Get $40,000 of Stock Protection for $13,000

You own a winner. It's been very good to you. But now you're nervous, watching gains, wondering if you should sell, dreading the next pullback. The traditional answer is protective puts. The problem? They're expensive, and if the stock grinds higher, you've just donated thousands to the options market for insurance you never used.

There's a capital-efficient alternative that most retail traders never consider. Instead of buying $40,000 worth of stock and expensive puts, you buy a deep ITM LEAPS call for ~$13,000, protect it with a longer-dated put, and finance that protection by selling monthly calls against it. After 2 to 3 call cycles, your put is paid for, sometimes with premium left over. Same exposure, same protection, one-third the capital. The freed-up cash goes to work elsewhere. This is how professional traders think about position construction, and this week's article walks through the exact mechanics.

👉 Read the full guide: The LEAPS Collar: A Smarter Way to Protect Your Position

📚 Educational Corner: Options Deep Dive

What are the Four Vertical Spreads? The Complete Beginner's Guide to Defined-Risk Options Trading

Most new options traders buy calls or puts outright, and most of them lose money to time decay. Every day that passes chips away at their position's value while they wait for the "big move" that may never come. Vertical spreads flip this dynamic entirely. By selling one option and buying another at a different strike, you collect premium instead of paying it, put theta on your side, and know your maximum loss before you ever click "submit."

The vertical spread is the foundation of professional options income trading for good reason. Whether you're running bull put spreads to profit from stocks staying above a level, or bear call spreads to collect premium below resistance, these structures let you choose your probability of profit, 50%, 70%, 80%, even 85%, and trade accordingly. This week's guide breaks down all four types, shows you how to select strikes using expected move, and gives you the 30 to 60 DTE sweet spot that captures maximum theta decay with minimum gamma risk.

👉 Read the full guide: What Is a Vertical Spread? The Complete Beginner's Guide

📊 The Implied Truth: Weekly Table Overview

Unlock the Full Picture - Upgrade to access the complete table, including all 100 equities

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 least slippage. The power isn't in the data; it's in how you interpret it.

Where You're Being Paid (IV Rank > 50%)

High IV Rank means option premiums are elevated relative to historical range. The market is pricing uncertainty, creating opportunities for strategies that profit from volatility compression.

Common approaches: Iron condors (30 to 60 DTE, 10 to 15 delta), credit spreads, CSPs, and PMCCs all benefit from elevated premium collection.

Respect the Trend: High ADX + Strong Relative Strength

RS above 70 shows market leadership. ADX above 30 signals directional conviction. Above 40 suggests institutional participation.

Framework:

• PMCCs: Push short calls to 10 delta or lower

• Bull put spreads work with the trend

• Tight call strikes create asymmetric risk in trending environments

Cheap Vol Warning (IV Rank < 20%)

Low IV Rank means compressed premiums. A $0.40 credit on a $5-wide spread creates 11.5:1 risk/reward, requiring very high win rates to be profitable.

Alternatives:

• Go very wide (10 to 20 delta, 45 to 60 DTE)

• Consider long strategies when vol is cheap

• Deploy capital where IV Rank is elevated

RSI Above 70 = Stretched, Not Broken

RSI above 70 signals strong momentum. Above 80 indicates parabolic moves. Neither guarantees imminent reversal, especially when confirmed by elevated ADX.

Risk perspective: Stretched readings don't predict timing or magnitude of pullbacks. Tight strikes in momentum = binary outcomes.

The Framework

Go where premiums are elevated (metals, uranium, energy with high IV Rank).

Respect technical momentum (ADX + RS) that suggests persistence over mean reversion.

Recognize unfavorable math in low volatility environments.

Use wider strikes when momentum indicators show strength.

The Implied Truth table describes current conditions, where premiums are rich, where trends have conviction, where markets aren't paying. Use it as a filter for opportunity assessment.

Quick Reference

👉 For detailed idea generation, explore my curated list of highly liquid ETFs and equities in this week’s issue of The Implied Perspective, where I break down specific trade frameworks/strategies, delta setups, and portfolio integration for premium sellers.

🎓 Course Announcement: PMCC Mastery Coming Soon

I'm taking names for my first course, launching in the next month or so.

I'm genuinely excited about this. Not because it's another revenue stream, but because I've spent months building something that doesn't exist anywhere else in this space.

PMCC Mastery will cover everything from LEAPS selection to short call management to the roll decisions that separate sustainable income from frustrating losses. This isn't a strategy overview, it's a complete implementation system with clear rules, real examples, and the decision frameworks I use every week in our live portfolios.

When you complete the course, you're not left alone with a PDF. You'll be added to the dedicated PMCC community forum where you can ask questions, see how others apply the rules, and stay accountable to a process that works.

Following PMCC Mastery:

• Credit Spreads: The Probability Player's Edge

• The Complete Wheel Strategy Course

If you want early access or want to be first in line when enrollment opens, reply to this email with "PMCC" in the subject line. I'll make sure you're on the list. Email in the “Let’s Stay Connected” section.

This is the beginning of building something real together.

The Bottom Line

This week reminded us that markets can deliver drama without direction. The S&P went essentially nowhere, the VIX spiked and faded, and the real money was made in the places most traders weren't looking.

Small caps outperformed. Value beat growth. The rotation we've been positioning for in our portfolios is playing out exactly as planned.

With February expiration next week, the next seven days are about execution, not prediction. Manage your winners. Cut your losers according to your rules. Don't let what should be mechanical decisions become emotional negotiations.

The markets will still be here when the dust settles. Your job is to make sure your capital is too.

🔗 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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💌 Send me your topic requests, whether for the newsletter, YouTube, or webinars. Seriously, send them. 🙂 

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

Educational use only. The Option Premium is a publication for educational purposes and does not provide personalized investment advice. Options involve risk and are not suitable for all investors. Always confirm details and manage risk prudently.