THE OPTION PREMIUM

Weekly Options Intelligence | May 31, 2026

A quick note before we get into this week.

We have stayed patient, and that patience is doing exactly what it is supposed to do. It gives our open positions room to work and make their best headway, rather than forcing outcomes onto our schedule. That discipline runs through everything. The Income Foundation, Wealth Without Shares, and The Implied Perspective each stand on their own, but they are built to reinforce one another. Use one, or let all three work together. The framework underneath never changes.

I spent more than 24 years trading options professionally before going out on my own last year. I did it with a clear understanding of the landscape. Most of what gets offered to investors and traders curious about options comes from marketers, or from people who have never traded serious money, telling you how to trade yours. The promises are big. The timeframes are short. Some of it crosses the line into guarantees. You see this approach everywhere, and the reason is simple and unfortunate: it works. It is what people want to hear, so it sells.

I view it as predatory and unrealistic, and worse, it quietly does real damage. It sets expectations that cannot hold, and when reality arrives, most people walk away convinced options are not for them. That is unfortunate, because options are a genuinely powerful tool for investors and traders. They deserve to be taken seriously, and they will never get that fair shake as long as the penny-stock approach to marketing is how readers get pulled in.

That is why I created The Option Premium. I wanted a service that treats you like an adult and respects your intelligence. One that will hold your hand when you need it, teach without talking down to you, and stay honest about what to expect. Get the long-term approach right, pair it with real discipline around risk management, and the opportunity for sustained results is on the table. I will not promise you a number. Anyone who does is guessing, or selling.

That refusal to promise is exactly why I will not ask you to take anything here on faith. Think about the last newsletter you signed up for. How many emails landed in your inbox each week after that? Three? Four? Five or more? I do not work that way. You get one email a week. One. I respect your time, your inbox, and your right to make your own decisions, with no pressure attached.

Pricing follows the same logic. I keep it well below what this kind of access usually costs, not as a deal to close you, but because education locked behind a high wall is just a different way of keeping people out.

So I will not tell you the results have been good and ask you to believe me. They have been good across all three services this year, and you can see for yourself, in real time, archived, every entry and every exit. What you are getting is more than an alert and an issue. Every piece of content is a full education in its own right. And if you want to know whether any of that holds up, do not take my word for it. Read what readers have said. They have no reason to sell you anything.

📰 What the Data Said This Week

The holiday-shortened week was supposed to be quiet. It was not.

Over Memorial Day weekend, Iranian forces launched targeted strikes against U.S. naval positions near the Strait of Hormuz. Markets were closed Monday. By Tuesday morning, oil had spiked to $96 and futures pointed sharply lower. Then something happened that, a year ago, would have been unthinkable: the Russell 2000 and Nasdaq both finished Tuesday up 1%. The market absorbed the strikes, priced them, and moved on.

Wednesday brought more drama. The Dow set a new record as fresh Iran peace rumors circulated, though they were later described as unsubstantiated. Semiconductors pulled back on profit-taking after the prior week's Nvidia-driven surge. By Thursday, the real fireworks arrived: PCE inflation printed at 3.8% year-over-year, up from 3.5% in March and the highest reading in nearly three years. Core PCE rose 0.4% month-over-month.

The market's response? New all-time highs on the S&P 500 and Nasdaq. The same day.

Dell Technologies surged 33%, its best day on record, after beating on both lines and raising full-year guidance. Snowflake jumped 36.5%, its best day ever, after inking a $6 billion AWS deal and projecting AI-driven growth that exceeded every estimate. These weren't just earnings beats. They were the AI infrastructure thesis being validated in real time by companies outside the Nvidia orbit.

Friday capped the week with the Dow clearing 51,000 for the first time, closing at 51,032.46 (+363 points). The S&P 500 finished at 7,580.06, its ninth consecutive winning week, the longest streak since 2023. The Nasdaq closed at 26,972.62, capping an 8% gain for the month of May. Robinhood unveiled "Agentic Trading," letting AI assistants execute investing strategies with minimal human involvement. Mizuho raised its price target.

For premium sellers, the sell zone expanded slightly from 8 to 9 ETFs above 50% IVR. SMH surged back to 86.94% as the semiconductor AI narrative reignited on Dell and Snowflake. Energy IV collapsed: XLE dropped from 74.5% to 52.47% as oil fell from $97 to $91 on ceasefire extension hopes. SPY upgraded to Above 70 RS for the first time since the breadth scare two weeks ago. The VIX settled at 15.32, the lowest since early May.

The most important technical development: SPY, QQQ, SMH, XLK, and VTI all carry Above 70 RS simultaneously. That's five of the six major equity-tracking ETFs in confirmed strong uptrends. The breadth measures ($MMFI 58.88, $MMTH 55.66) continue improving. The rally isn't just real. It's broadening.

This week, Implied Perspective members are managing June cycle positions. Every entry and exit shared in real time and archived.

👉 [See what members are trading this week at theoptionpremium.com →]

📅 The Week Ahead

The jobs report on Friday is the week's anchor. With PCE at 3.8% and rates on hold, the labor market is the last variable that determines whether Warsh's Fed stays patient or starts signaling a tighter posture. Consensus expects around 75,000 jobs added, a continued slowdown. ISM Manufacturing on Monday will tell us whether the factory sector is absorbing the oil shock or contracting. ISM Services on Wednesday will show whether the services economy, which has been the resilience story all year, is holding. The FOMC meets June 16-17, Warsh's first meeting as Chair. This week's data shapes the statement he'll deliver.

📊 Weekly Market Stats

📰 Weekly In-Depth Articles

🗓️ Tuesday: Poor Man's Covered Call on IBIT: A Smarter Bitcoin Trade

🗓️ Thursday: The PMCC Ladder: How to Build a Weekly Premium Stream From Poor Man's Covered Calls

🗓️ The Research Desk

Two researchers in Taiwan, Chien-Ling Lo and Wen-Rang Liu, were quietly solving one of options trading's most persistent puzzles while Wall Street chased the next momentum stock: how do you capture the edge of selling premium without getting crushed during rallies? Their answer, published in the Pacific Basin Finance Journal, is elegant. When the put-call ratio is high (market pessimism), fully invest in the index. When it's low (complacency), sell premium. Over 201 months from 2007 to 2023, their conditional put-write strategy improved the Sharpe ratio from 0.55 to 0.86. Trade frequency was cut by more than half. Most importantly, they solved the rally problem: the approach participates fully in bull markets instead of capping upside for a measly premium payment. The honest caveat: the study comes from a retail-dominated market in Taiwan, not the S&P 500. It's a promising hypothesis, not a settled answer. Use it as a lean, not a switch. But the underlying insight, that timing premium sales to crowd sentiment rather than selling mechanically every month, is worth studying carefully.

👉 Read the full article at theoptionpremium.com

🎓 Options 101: What Is Delta? The One Greek Every Options Investor Needs First

Delta is the most useful number on your options screen. A call with a delta of 0.30 tells you three things simultaneously: the option moves approximately $0.30 for every $1.00 in the stock, it has roughly a 30% probability of expiring in the money, and it represents the equivalent of being short about 30 shares on a directional basis. Three pieces of information for the price of one number.

For premium sellers, delta is the primary tool for strike selection. The 0.20 to 0.35 range is the sweet spot: the probability of the option expiring worthless is roughly 65-80%, and the premium is meaningful without being so rich that it signals danger. A covered call seller at 0.30 delta keeps 10% of headroom on a $50 stock. A cash-secured put seller at 0.25 delta accepts roughly a 25% chance of assignment at a price they've already decided they're willing to pay. Delta is not fixed: it changes as the stock moves, as time passes, and as implied volatility shifts. Understanding that it's a snapshot, not a permanent description, is what separates mechanical traders from reactive ones.

Income Foundation members start here. Delta is where every trade begins.

👉 Read the full article: What Is Delta? The One Greek Every Options Investor Needs First

👉 [See the framework in action at theoptionpremium.com →]

🧠 Mental Capital

Brad Barber and Terrance Odean have spent twenty-five years studying retail trader behavior. Their most recent finding is the one that should keep you up at night: retail trades concentrated in attention-grabbing stocks earn negative 15.3% annualized. Retail trades in stocks that are not attention-grabbing earn positive 6.8%. Same investors. Same brokerages. The difference is which stocks they chase. The trades that feel most urgent are systematically the worst trades to make.

The pattern is the same almost every time. A trigger (a screenshot, a headline). A story your brain constructs to justify why the opportunity is still available. A compression of time that makes patience feel like paralysis. An override of your checklist, your sizing rules, your probability assessment. An entry larger than your framework permits. And then reality: the move was already exhausted by the time your order filled. You were not early. You were the exit liquidity for someone who was early. Three structural defenses that don't require willpower: the 24-hour rule (add it to tomorrow's list, not today's trades), the criteria check (write down which rules you're about to break and why), and the opportunity log (track what you skipped and check in 30 days later). After six months, the data almost always shows that the trades you didn't take were dodged bullets.

👉 Read the full article: FOMO in Options Trading: The Psychology of Missing Out

Educational Corner: How to Build a 6-Stock Wheel Portfolio for Retirement Income

Most retirement income articles promise a paycheck. The Wheel does not produce a paycheck. It produces a probability distribution of premium received, dividends collected, and occasional drawdowns on stock you now own. That distinction matters. A six-stock Wheel book at 3-5% per position occupies roughly 18-30% of total portfolio capital. The remaining 70-82% belongs to whatever your broader allocation calls for. At 4% average per position on a $500,000 portfolio, a single name suffering a 40% drawdown costs 1.6% of total capital. Recoverable. The same drawdown at 16% sizing costs 6.4%, which is structurally harder to recover for someone drawing income rather than contributing new capital. Strike selection biases toward 0.20-0.30 delta at 30-45 DTE. The roll-versus-assignment decision defaults more often to "accept assignment" in a retirement sleeve because you picked stocks you would own and the covered call leg begins generating premium immediately. The central vulnerability is sequence-of-returns risk: in a sustained drawdown, the strategy converts cash into underwater stock.

Income Foundation members see the wheel applied in real time. Every trade archived.

👉 Read the full article: How to Build a 6-Stock Wheel Portfolio for Retirement Income

👉 [See the framework in action with real trades at theoptionpremium.com →]

💡 Did You Know?

The concept of options trading predates the stock market by about 2,000 years. In Aristotle's "Politics," he tells the story of Thales of Miletus, a philosopher who, based on his study of weather patterns, secured the right to use olive presses at a fixed price before the harvest. When the harvest was enormous and demand for presses surged, Thales exercised his options and rented the presses at a premium. He wasn't interested in the olive oil business. He was proving that a philosopher could make money if he wanted to. What he actually proved was the first documented call option in history.

The options market as we know it didn't exist until 1973, when the Chicago Board Options Exchange opened and standardized contracts for the first time. Before that, options were traded over the counter with no standardization, no clearing, and no guarantee that the counterparty would perform. The Black-Scholes model was published the same year. In a single twelve-month period, the options market went from an informal handshake market to a standardized, theoretically priced, exchange-traded instrument. That's 2,400 years of informal options trading followed by one year that changed everything.

📊 The Implied Truth: ETF Watchlist

The Weekly ETF Volatility and Trend Intelligence Report

New here? Read the complete guide on how to read these tables: How to Read the Implied Truth Tables

The ETF scan this week shows a clear shift: semiconductor IV surged back to near-peak levels, energy IV collapsed as oil fell from $97 to $91 on ceasefire extension hopes, and SPY upgraded to Above 70 RS as five major equity ETFs entered confirmed strong uptrends simultaneously.

Top of the IV Rank scan: SMH (86.94%), EEM (63.41%), URA (61.89%), GDX (60.69%), XHB (59.28%), XLK (56.78%), XLI (53.50%), XLE (52.47%), XOP (51.44%).

Notable Readings

Largest week-over-week IV Rank expansions: SMH +12 points (74.7% to 86.94%), back near the pre-Nvidia peak as Dell and Snowflake reignited the AI trade. EEM +7 points (56.2% to 63.41%). GDX +5 points (55.8% to 60.69%). XLK +7 points (50.0% to 56.78%).

Largest week-over-week IV Rank contractions: XLE -22 points (74.5% to 52.47%), the single largest weekly drop on the board as Brent fell from $97 to $91 on ceasefire extension hopes. XOP -21 points (72.0% to 51.44%). USO -22 points (49.5% to 27.0%). Energy IV is deflating rapidly.

Notable persistence: URA has now held above 60% IV Rank for six consecutive weeks, the longest streak on the watchlist. SMH has been above 74% IVR for three of the last four weeks, the most persistently elevated sector ETF outside of energy. GDX crossed back above 60% after a brief dip.

ETF Trend Watchlist

Sorted from most overbought to most oversold. Where momentum and premium intersect.

The ETF Trend Watchlist ranks all 31 ETFs from most overbought to most oversold using RSI, then layers in ADX for trend strength, the +DI/-DI directional gap for momentum conviction, IV Rank for premium richness, the 30-day expected move in dollars, and a Read classification: Stretched (RSI 70+), Firm (60-70), Balanced (40-60), or Soft (30-40). ADX bolded when it crosses 25. IVR shaded green above 50 (rich), gold 25-50, grey below 25 (thin).

Most Overbought: Where Momentum Is Strongest

Five ETFs now carry RSI above 70 with +DI dominance: XLK (79.4), QQQ (76.5), SPY (75.3), SMH (74.8), and VTI (73.0). This is the broadest concentration of overbought readings since the rally began. SPY's upgrade to Above 70 RS this week is the most significant momentum development: it confirms the broad market is participating, not just tech.

XLK's +DI/-DI gap of 30.5 points is the widest on the entire board. QQQ at 26.4. SMH at 22.0. These are institutional-grade directional readings.

Most Seller-Dominated: Where Bearish Pressure Is Real

XLE: -DI at 32.0 vs +DI at 23.1 (9-point gap). Oil fell from $97 to $91 on ceasefire hopes. Energy flipped from the richest IV pocket last week to bearish territory this week. IVR still at 52.47%.

XOP: -DI at 31.7 vs +DI at 19.5 (12-point gap). Energy producers followed crude lower.

USO: -DI at 32.2 vs +DI at 23.0 (9-point gap). IVR collapsed from 49.5% to 27.0%.

XLP: -DI at 28.9 vs +DI at 18.0 (11-point gap). Consumer staples weakening as money rotates into tech and growth. RS flipped to New Below 50.

FXI: -DI at 35.3 vs +DI at 20.1 (15-point gap). The widest bearish gap on the board. China underperforming as trade truce uncertainty persists.

The Indexes: SPY Below 35%, QQQ Above 35%

SPY IVR at 13.79%. DIA at 16.57%. Both well below 35%. QQQ at 37.86% remains the only index above the threshold. The VIX at 15.32 is near pre-war levels.

Breadth: Continuing to Improve

$MMFI at 58.88 (was 57.18). $MMTH at 55.66 (was 53.60). Both continue improving for the second consecutive week after the breadth scare two weeks ago. The +DI/-DI relationship on $MMFI has nearly equalized (31.80 vs 28.13), with +DI now reclaiming a slight edge. $MMTH shows +DI at 29.88 vs -DI at 25.69, the first clear +DI dominance in three weeks. The breadth recovery is strengthening.

The full Notable Moves section, this week's complete framework, and the 100+ equity volatility breakdown are available in The Implied Perspective.

👉 [Read this week's Implied Perspective at theoptionpremium.com →]

The Bottom Line

Nine straight weeks. S&P at 7,580. Dow above 51,000. Nasdaq up 8% in May. PCE at 3.8%. Iran struck over the weekend. And the market set records anyway.

For premium sellers: the sell zone expanded slightly to 9 above 50% IVR. SMH surged back to 86.94% as Dell and Snowflake reignited the AI trade. Energy IV collapsed with XLE dropping 22 points as oil fell to $91. SPY upgraded to Above 70 RS. Five major equity ETFs now carry Above 70 RS simultaneously, the broadest overbought reading since the rally began. Breadth continues improving. The trend says up. The data says size conservatively at 2-5%, close at 50% profit, and let the math work. The FOMC meets June 16-17. Warsh's first meeting as Chair. This week's jobs data shapes the statement he'll deliver.

🎓 Coming Soon: PMCC Mastery

The complete implementation system: LEAPS selection, short call management, roll decisions, and every step from first position to sustained income. Followed by Credit Spreads and Wheel Strategy courses.

Reply "PMCC" to [email protected] for early access. Annual all-access members ($1,495/year) receive every course at no extra cost.

A Quick Note

Every week I get emails from readers who start with some version of the same sentence: "My friend forwarded me your newsletter and I've been reading ever since." That sentence is the entire business model. There is no marketing team. There is no ad budget. There is no affiliate program. There is one person writing a newsletter on Sunday evenings, and there are readers who care enough to pass it along. If you are one of those readers, I want you to know that every forward, every link dropped in a group chat, every "you should check this out" text has a ripple effect I can actually see in the numbers.

The growth over the past three months has been the strongest in the newsletter's history, and it happened because of you. So if there is someone in your life who has been looking for options education that respects their intelligence, who is tired of being sold to, who just wants the math, strategies, etc., explained clearly by someone with no agenda other than education, I would be deeply grateful if you introduced them to what we're building here.

Thank you for your time. Thank you for your trust. See you next Sunday.

🔗 Let's Stay Connected

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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

The Option Premium is published for educational purposes only and does not constitute personalized investment advice. Options involve risk and are not suitable for all investors. Past performance does not guarantee future results. Always confirm details and manage risk prudently.