📩 The Option Premium Weekly Issue – June 15, 2025

First off, Happy Father's Day — wishing all the dads out there a fantastic day!

It’s been just over a month since we launched our paid services, and so far, things are off to a strong start. In our most affordable tier, The Income Foundation, we’ve already generated enough premium in the very first expiration cycle to cover well over three full years of the subscription.

Let that sink in: three years, paid for in just a few weeks — from a service that costs only $9 a month, $79 annually.

You won’t find many places offering this level of education, trade ideas, real-time alerts, and guidance at that price. So why is it priced so low?

Because we’re building something bigger. I hope to see you aboard soon!
 

📉 Market Snapshot and Commentary

Data Holds, Volatility Builds: What Options Traders Should Be Watching This Summer

Markets may be digesting tariff headlines and geopolitical tension, but underneath the noise, the core message from economic data is simple: the U.S. economy remains solid.

GDP is tracking above 3%. Inflation is easing. And while job growth is slowing, it’s doing so gradually, not abruptly. If you're trading options, this environment offers what we always look for: resilience up top, uncertainty around the edges, and rising volatility underneath, a textbook backdrop for high-probability, risk-defined trades.

The Data Looks Better Than the Headlines

GDP: Q2 growth is now projected to come in above 3%, thanks to steady consumption and softer inflation inputs.
Jobs: Unemployment remains near historic lows (4.2%), with wage growth (3.9%) still outpacing inflation.
Inflation: CPI and PPI both came in below expectations last week, with headline inflation now hovering near 2.4%, far from the crisis levels of 2022.

📌 Options Takeaway:
When macro data holds firm while headlines stir fear, you get dislocations in implied volatility. That’s a premium seller’s window. Focus on sectors with high IV Rank and no corresponding breakdown in price (think XLF, XLI, or EFA). It’s not about direction. It’s about probability and time decay.

Markets Pull Back Slightly, But Strength Persists

After a strong rally off April’s lows, the S&P 500 cooled slightly last week, down 0.4%. The Nasdaq slipped 0.6%, while the Dow lost 1.3%. International stocks held up better, with the MSCI EAFE gaining 1.0%.

The pullback isn’t surprising. Volatility is creeping back in as investors weigh the next round of catalysts: trade deals, tax legislation, and rate decisions. But as long as economic fundamentals remain intact, any pullbacks should be seen through a premium-selling lens, especially in names where IV expands faster than price decays.

Tariffs in Focus: The July 9 Cliff

The U.S. and China have agreed to a partial tariff framework, cutting the average rate on Chinese exports from 145% to 55% through a mix of permanent and temporary measures. The U.S. will ease restrictions on jet engine parts; China will reinstate rare-earth mineral licenses for six months. Still, many deadlines remain fluid, and the July 9 expiration of the 90-day pause with other partners looms large.

📌 Options Takeaway:
Volatility tied to trade policy isn’t a shock—it’s a signal. Names like FXI, XLI, and SMH remain sensitive to tariff uncertainty. Trade defined-risk spreads into known events. This is where calendars, diagonals, and verticals shine.

Geopolitical Risk Creeps Back Into View

Airstrikes in the Middle East lifted oil prices by nearly 14% last week and sparked a minor risk-off reaction in equities. Historically, these moves tend to be short-lived, but they create volatility pockets that traders can exploit.

📌 Options Takeaway:
The spike in oil gave us a volatility gift. If you're looking at XLE or XOP, consider short puts on weakness or neutral spreads once RSI stabilizes. For traders looking to fade energy strength, lean on bear call spreads in overbought names like GDX.

Rate Cuts and Tax Reform: Coming This Fall?

The Fed remains in wait-and-see mode, but the setup for one to two rate cuts by year-end is firming. Inflation is under control, the labor market is stable, and if tariffs create a drag in Q3, the Fed has room to act.

Meanwhile, the proposed tax bill includes extended expensing provisions and sector deregulation. While not immediately stimulative, it could reawaken corporate spending into 2026. But in the short term, it introduces headline noise, which means more fuel for elevated IV.

📌 Options Takeaway:
Watch for front-month IV to stay elevated while back-month vol compresses. That’s a recipe for short-term premium selling with long-term positioning optionality. Great environment for building PMCCs, rolling diagonals, or adding to core cash-secured put trades.

Final Word: Trade the Setup, Not the Story

Yes, there’s noise. Yes, there are risks. But the data tells us this isn’t a breakdown, it’s a shifting market with defined catalysts and stable fundamentals.

That’s a rare combo.

We’re not predicting market direction here at The Option Premium. We're aligning with the probabilities:

• Rising IV + resilient price = edge

• Macro stability + catalyst timing = setup

• Uncertainty + structure = opportunity

This is the type of market where neutral trades, short-duration income setups, and well-structured PMCCs can work beautifully, if you stay patient and let the data lead.

📰 Weekly In-Depth Articles 

🗓️ Tuesday, June 10th: When the Rally Runs Thin: Why More Traders Are Turning to Bear Call Spreads

🗓️ Thursday, June 12th: The Collar Strategy Explained: How Options Traders Can Lock in Gains and Limit Losses Without Selling Shares

🎓 Options 101: The First Steps to Trading

Options 101: How Options Are Priced: The Basics (Explained Simply)

Ever looked at an option and wondered, “Why does this cost $2.50?”

That number isn’t random, it’s the result of time, volatility, and market expectations working behind the scenes.

In this week’s Options 101 article from The Option Premium, we break down exactly how option prices are calculated, and more importantly, how to use that knowledge to become a smarter trader.

✅ The two forces behind every option price (intrinsic vs. extrinsic)
✅ Why options lose value over time, and how to make that work for you
✅ How volatility impacts premiums (and what to watch for)
✅ Real-life examples that walk through the math step by step
✅ Common beginner mistakes to avoid

If you’re new to options or still unsure what you’re really paying for, this article will give you the clarity and confidence to stop guessing — and start understanding.

👉 Options Trading 101: How Options Are Priced - The Basics

🧠 Mental Capital

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

The Setup Is the Signal — Why Smart Options Traders Let the Market Come to Them

Ever feel like the moment you start scanning, you're already behind?

This week in The Option Premium, we break down one of the most important lessons in options trading: edge isn’t something you chase, it’s something that emerges when structure aligns.

Inside this edition:

✅ Why predicting movement is a losing game, but waiting for structure pays
✅ How to filter for real setups using IV Rank, RSI, and expected move math
✅ What separates signal-chasers from setup-based professionals
✅ A blueprint for high-probability trades when the market overreacts
✅ The Setup Premium: Why less frequent, higher-quality trades compound faster

This is the issue every serious options trader needs to read. Because trading without structure isn’t bold—it’s expensive.

👉 Read the full breakdown at Mental Capital – The Setup Is the Signal: How Smart Options Traders Let the Market Come to Them

Don’t chase noise. Trade edge. Let the setup be the signal.

📊 The Implied Truth: Weekly Table Overview

This Week's Premium Landscape – IV, RSI, and Real Opportunities

Welcome to this week’s premium-selling landscape for serious options traders.
Each ETF below has been screened using the same indicators professionals rely on to find real opportunity, not noise: RSI extremes, IV Rank, IV Percentile, and Put/Call Ratios.

These metrics help answer three essential questions:

• Is the underlying overbought or oversold?

• Are premiums rich enough to justify the risk?

• What’s sentiment telling us beneath the surface?

This week’s options landscape reflects a market balancing between rotation and resilience. Several ETFs show extremes in RSI, Implied Volatility, and IV Rank, offering key signals for premium sellers, especially those favoring high-probability setups. Meanwhile, the VIX and key breadth indicators like $SPXA200R and $SPXA50R are flashing early warning signs of weakening momentum under the surface.

Let’s break it down.

Where Premium Sellers Should Be Looking

When looking to sell premium, we want elevated IV Rank, strong IV Percentile, and clean setups where implied volatility exceeds realized volatility. Here are some of the top setups by category:

High IV Rank + High RSI = Caution or Opportunity?

These ETFs are overbought with high volatility pricing—ideal for mean-reversion trades, such as credit spreads or iron condors:

• USO:

  • IV Rank: 109.1, RSI(2): 99.02, RSI(14): 78.73

  • Oil is overbought with IV through the roof—perfect for defined-risk premium selling, but manage directional exposure carefully.

• XLE & XOP:

  • Energy sector names with RSI(2) > 99, IV Rank ~30

  • Elevated short-term RSI and implied volatility suggest the market is overpaying for downside protection.

• URA (Uranium):

  • IV Rank: 48, RSI(2): 84.31, RSI(14): 79.04

  • This is an edge case—strong trend but near exhaustion. Great candidate for a defined-risk call credit spread if you're tactical.

RSI Extremes – When Markets Run Too Far, Too Fast

Short-term RSI is often a useful contrarian indicator for timing premium sales. ETFs with RSI(2) under 10 are typically oversold, offering higher risk premiums—but only if vol is also high.

Oversold with Elevated Volatility

• XLF (Financials)

  • RSI(2): 2.53, IV Rank: 29.7, Put/Call: 1.51

  • Banks are under pressure and options are priced with some fear. This can be an excellent spot for short puts or neutral spreads with a high POP.

• XLI (Industrials)

  • RSI(2): 3.92, IV Rank: 21, Put/Call: 5.35

  • Sentiment is crushed. Combine that with 5x as many puts being bought, and it’s a potential short-term reversion candidate.

• DIA (Dow ETF)

  • RSI(2): 8.88, IV Rank: 24.1, Put/Call: 1.10

  • Another potential reversion play. Dow breadth has been lagging, but if IV stays elevated, credit spreads might work here.

Overbought + Weak Premium = Stay Away or Wait

These ETFs have RSI(2) > 80, but their IV Rank is too low to justify selling premium. That means less edge, even if the setup looks stretched:

• GLD

  • RSI(2): 97.5, IV Rank: 50 – borderline interesting

  • But rising gold often comes with sticky high vol. Consider an iron condor if the uptrend stalls.

• GDX (Gold Miners)

  • RSI(2): 93.15, IV Rank: 37.3

  • Elevated but trending. You might be late if you bet on reversion too early.

VIX & Market Volatility Context

• VIX at 20.82 with a 46.9 IV Rank means we’re in a mid-volatility regime—enough juice for selling options but not a panic-level spike.

• SPY and QQQ both have moderate IV Ranks (~24 and ~20), and RSIs around 20–50, signaling a neutral to slightly oversold condition.

Volatility isn’t cheap, but it's not exploding either. That favors traders who are selling defined-risk spreads rather than going naked.

Hidden Edge – Unusual Combinations

Where the data gets interesting is when trader positioning (put/call ratios) diverges from volatility signals:

• SMH (Semiconductors)

  • Put/Call: 3.25, IV Rank: 19.1, RSI(14): 64.21

  • Extremely bearish positioning despite relatively muted implied volatility. A possible fade the fear play.

• XLV (Health Care)

  • Put/Call: 3.01, IV Rank: 34.5, RSI(2): 52.88

  • Might be pricing in event risk. These types of setups reward neutral premium trades like condors or butterflies.

• XLB (Materials)

  • Put/Call: 5.68, IV Rank: 42.3, RSI(2): 19.52

  • Traders are heavily hedged. With IV climbing, it may be worth looking at short puts below major support.

Final Signals from The Implied Truth

• Breadth is fading:

  • $SPXA200R = 47.5, $SPXA50R = 69.9

  • Fewer stocks above their moving averages = weakening internals beneath the index surface.

• Energy is overbought

  • High RSI and IV Rank in XLE, XOP, URA, USO – don't chase.

• Financials and Industrials are oversold with edge

  • XLF, XLI, DIA – some of the best-looking reversion setups with strong reward-to-risk profiles.

For New Traders: What This All Means

If you’re newer to options, here’s how to use this information:

• IV Rank tells you how expensive options are compared to the past year. High = better for selling.

• RSI is a measure of momentum. A low RSI means a bounce might be coming. A high RSI means it could be topping out.

• Put/Call Ratio shows trader sentiment. High means fear, low means greed.

• Look for alignment: When RSI is stretched, IV Rank is high, and positioning is fearful, there’s usually opportunity.

What We’re Watching at The Option Premium

We’re not revealing our trade alerts here, but these are the exact types of setups we scan daily. The difference is that our paid members get:

• Precise entry + exit trade alerts

• High-probability setups using our Implied Truth filters

• Full portfolio breakdowns + market context

• Real trades, real management, real transparency

📊 Quick Reference: The Implied Truth Table

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

If you want the specific trade setups, how I structure the entries, and what I avoid, that’s all covered in my premium services.

📚 Educational Corner: Options Deep Dive

Educational Corner: Options Trading in a Retirement Account (IRA, 401k): Pros, Cons, and Rules You Need to Know

Think options have no place in your retirement account? Think again.

In this week's Educational Corner, we explore how strategies like cash-secured puts, covered calls, poor man’s covered calls, bull put spreads and several other options strategies can work inside IRAs and 401(k)s, often with tax advantages, defined risk, and no margin needed.

But make no mistake: retirement accounts come with strict limitations. The IRS bars naked options, margin, and uncovered risk. And one wrong move could create account issues or tie up your capital in ways you didn’t expect.

Here’s what you’ll learn:

• Which strategies are allowed, which are restricted, and how to gain broker approval

• The advantages of trading options in tax-deferred (or tax-free) accounts, including compounding without short-term gains

• Why assignment risk, margin restrictions, and broker limitations matter more than most realize

• A breakdown of who should use options in retirement accounts, and who absolutely shouldn’t

Key Insight: Retirement accounts aren't for chasing returns. They’re for structured, repeatable income strategies that prioritize preservation, tax efficiency, and long-term control.

👉 Inside the article, we also reveal how traders at The Option Premium use tailored strategies like PMCCs, cash-secured ladders, and defined-risk spreads inside retirement portfolios to capture consistent premium, without violating the rules.

Because retirement isn’t a race. It’s the longest trade you’ll ever make.

🔗 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