📩 The Option Premium Weekly Issue - October 12, 2025

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Building Something That Lasts

Volatility has finally returned, and with it, opportunity. While the S&P 500 is up 11.1% year to date, our Wealth Without Shares portfolio has gained 29.6%, giving back just 1% last week even as all three major indices fell more than 2.4%. Our hedge in The Implied Perspective is up nearly 30%, and the hedge is doing exactly what it was designed to do, provide stability to our long delta strategies when markets wobble. And in The Income Foundation, members have generated $1,115 in income on a one-contract basis, all while the total cost of the service has been just $45 over the same period.

Every week, I’m reminded that The Option Premium isn’t just another newsletter, it’s becoming a living record of how disciplined trading really works. What started as a simple idea, a place to organize and share the strategies I’ve used for more than two decades, has quietly grown into a serious resource for traders who care more about process than prediction. That’s the part I’m proudest of.

We’re building something durable here. Not a hype machine, not a social feed of “hot trades,” but a library of practical education, real results, and honest discussion about what it takes to trade for a lifetime. The steady growth of The Option Premium, entirely organic, tells me there’s still a strong appetite for transparency and substance in this industry. I’m grateful for that, and even more motivated to keep delivering and expanding on it.

Over the coming months, you’ll see this vision expand in ways that make The Option Premium more valuable than ever, educational videos, new data-driven tools, live discussions, idea generation, watchlists and deeper dives into strategy design. My goal is simple: to make this publication one of the most trusted and enduring options trading resources out there, built on respect for your time, your intelligence, and your commitment to improvement.

📰 Market Commentary: Calm Faces Chaos

Markets are brushing off Washington’s dysfunction, at least for now.

The federal shutdown has entered week two with little progress, yet investors remain focused elsewhere: AI headlines, the Fed’s next move, and trade tensions. Historically, shutdowns shave a little off GDP, then rebound. But the longer this drags on, the more friction builds, from delayed paychecks to missing data that could complicate the Fed’s next rate decision.

What Really Moves Markets

• AI and rate cuts are still running the show. The market prices a 95% chance of a Fed cut later this month, helping lift small caps and support tech.

• Gold just crossed $4,000, a 50% surge this year. It’s less about inflation and more about faith, or lack of it, in fiscal discipline and central-bank independence.

• Trade policy re-entered the picture after tariff threats rattled markets on Friday. Expect more headlines, not clarity.

October’s Pattern

Friday snapped a 48-day streak without a 1% S&P decline, one of the longest in 25 years. October is historically the most volatile month, and with markets still near highs, some turbulence is overdue.

For disciplined options traders, this isn’t risk, it’s opportunity:

• Higher implied volatility means richer premiums for condors, short puts, and covered calls.

• Quick exits (35 to 50% profit targets) often outperform stubborn holds.

• Traders running long-delta positions (PMCCs, diagonals) can use pullbacks to lower cost basis.

The Takeaway

Short-term volatility isn’t chaos, it’s the price of admission for long-term gains. Trade the probabilities, not the politics.

📊 Weekly Market Stats

📰 Weekly In-Depth Articles 

🗓️ Tuesday, October 7th - The Statistical Edge of Earnings Season: Turning Volatility Into Opportunity

🗓️ Thursday, October 9th - Building a Wheel Strategy Portfolio: Step-by-Step Implementation

🧭 The Earnings Playbook

(Educational and idea-generating for all readers)

Earnings Season Kicks Off: Big Banks and Big IV

This week marks the official start of earnings season, and as usual, the big banks lead the charge. Citigroup (C), JPMorgan (JPM), Wells Fargo (WFC), and Bank of America (BAC) all report before the bell on Monday and Tuesday, and the data tells a clear story: implied volatility (IV) has been steadily rising, but not exploding.

Despite the political noise and growing fiscal tension in Washington, markets have stayed remarkably calm, yet option pricing is quietly anticipating movement. Average IV ranks across the financials sit around 29-30%, with expected moves ranging from ±4-5%. That’s moderate, not panic, not complacency.

For traders, that combination often favors defined-risk income setups like iron condors or short strangles built around expected move ranges. The market’s not expecting fireworks, but with IV elevated versus its one-month average, short premium still carries decent reward for the risk, provided you size small and manage early.

Outside of financials, watch TSM (Taiwan Semiconductor) with an IV Rank near 36% and a ±$21.40 expected move. That’s a serious setup for volatility traders, especially with AI and chip sentiment front and center.

As always: position size is key. Earnings trades are one-day events, quick in, quick out, and should represent only a fraction of your portfolio risk.

🧭 Earnings Season Options Trade: A Step-by-Step Guide: Explore the in-depth, quantitative approach to the best strikes, probabilities, and setups for earnings trades: learn the mechanics of the high-probability approach.

👉 For detailed frameworks, including delta targets, exit triggers, and trade structuring ideas, join the paid edition: The Implied Perspective. 

⁉️ Did You Know?

Options Don’t Decay Evenly, They Decay Faster Near Expiration

Every options trader knows that options lose value over time, that’s time decay, or theta.

What’s often missed is that theta isn’t linear. The rate of decay increases as expiration gets closer.

• Around 45 to 60 days out, decay is gradual.

• In the final 10 to 20 days, it accelerates sharply.

This happens because most of an option’s extrinsic value (the time component) disappears right before expiration, while intrinsic value, if any, remains steady.

For Options Sellers

Understanding how time decay speeds up helps you structure better trades:

• Selling options with 30 to 60 days to expiration captures the most efficient part of the decay curve.

• Rolling positions before the final week avoids excess gamma risk, large swings as expiration nears.

Time decay isn’t a mystery. It’s math, and if you sell premium, it’s one of your biggest allies.

🎓 Options 101: The First Steps to Trading

Why Probabilities Matter More Than Predictions

This week’s Options 101 article cuts to the core of what separates professionals from speculators. Most traders start out trying to predict the future, guessing where the market, Tesla, or the Fed will go next. But the pros know better: trading isn’t about fortune-telling, it’s about mathematics, discipline, and probability.

The piece breaks down how professionals use delta, implied volatility, and position sizing to stack the odds in their favor, trading like a casino that wins over hundreds of bets, not a gambler chasing one big score. You’ll see why focusing on probabilities transforms your mindset, your results, and your longevity as a trader.

Takeaway: Prediction feeds ego. Probability builds wealth. When you trade with math on your side, you stop guessing, and start compounding.

👉 Read this week’s Options 101 article to learn how mastering probabilities, not predictions, is the key to lasting success in options trading.

🧠 Mental Capital

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

How the Greats Think About Risk: Respect, Not Fear

The greatest traders I’ve ever met share one unglamorous truth: they don’t fear risk, and they don’t ignore it, they respect it. Deeply. Obsessively. While most chase excitement or trade on emotion, the greats approach every position like they’re handling nitroglycerine, steady hands, no sudden moves, and absolute awareness of what could go wrong.

They understand something most traders never learn: fear clouds judgment, but respect clarifies it. Fear causes panic-selling, revenge trading, and missed opportunities. Respect builds structure, discipline, and survival.

This article isn’t about being fearless. It’s about being rational in a world that rewards patience, humility, and math over adrenaline. You’ll see why the best traders act slower, risk less, and think longer, and why that’s exactly what keeps them in the game while everyone else burns out.

👉 Read the full Mental Capital article: Learn how to build the mindset that every professional options trader eventually discovers, the quiet, disciplined respect for risk that transforms trading from a guessing game into a lifelong craft.

🔗 Read it now on The Option Premium, and start trading with respect, not fear.

📊 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.

Quick Reference

This Week’s Premium Landscape: IV, RSI, and Real Opportunities

What this week’s volatility metrics (IV Rank and IV%) coupled with multi-timeframe RSI data (2, 5, 9, 14) tell us about risk and opportunity.

🧭 Where Premium Sellers Should Be Looking

Volatility is back. The VIX sits near 21.7 with RSI(2) = 95, a short-term fear spike that usually cools.

Across major ETFs, IV Rank has pushed into the 30 to 50% zone while short-term RSIs (2, 5) are deeply washed out. That backdrop favors defined-risk premium selling.

Most favorable setups (rich IV + washed-out RSIs):
XHB, XLB, RSP, EFA, EEM, KRE, XRT

• IV Rank: ~33-57%

• RSI(2): ~1-6 → exhaustion

• RSI(5): ~13-25 → beginning to stabilize

• RSI(9–14): ~28-40 → weak but basing

Breadth: Only about 39% of the S&P 500 is above its 50-day and 52% above its 200-day. Weak breadth with rising IV often precedes mean-reversion pops.

📉 RSI Extremes (2, 5, 9, 14)

Oversold clusters: DIA, KRE, RSP, XLF, XHB → RSI(2) ~1-5 and RSI(5) ~13-17.
Short-term exhaustion rarely persists for long.

Overbought clusters: SLV, URA, GLD, TLT → RSI(2) ~90+ and RSI(5 to 14) ~70-80.
Momentum fatigue suggests consolidation risk.

⚡ VIX & Market Volatility

VIX short RSIs (2, 5, 9, 14) are all elevated at 95 / 87 / 80 / 73. That’s often volatility exhaustion, not panic, and it favors income trades (iron condors, short puts) with quick 35 to 50% profit targets.

🧩 Hidden Edge - Unusual Combinations

• SLV, URA, GLD: High IV Rank and high RSIs across all frames → defined-risk call-side ideas only.

• KRE, XLF: Low RSI(2) with mid IV Rank → attractive short-term bounce candidates.

🏁 Final Signals from The Implied Truth

• Best setups occur where IV Rank > 30 and RSI(2) < 10.

• Fade where RSI(14) > 70, but keep risk defined.

• Breadth is weak, vol elevated, and RSI extremes widespread → expect bounces, but position sizing matters most.

👉 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, delta setups, and portfolio integration for premium sellers.

📚 Educational Corner: Options Deep Dive

How to Use RSI to Time Options Trades (Without Fooling Yourself)

Most traders think RSI is a crystal ball. It’s not, it’s a mirror. It reflects what has happened, not what will. Yet, it lures traders into believing every “overbought” signal means an imminent pullback and every “oversold” reading means a bounce is around the corner. The reality? Markets can stay overbought or oversold far longer than your spreads can stay solvent.

In this week’s Educational Corner, I break down how professional options sellers use RSI the right way, across multiple timeframes, to identify when momentum is truly stretched, when it’s just beginning, and when it’s finally fading. By layering RSI(2), RSI(7), and RSI(14), I reveal how to stop chasing tops and bottoms and instead structure trades with a real statistical edge.

You’ll learn:

• Why a single RSI reading lies to most traders.

• How three RSI timeframes together reveal hidden momentum shifts.

• How to combine RSI analysis with the expected move to improve strike selection and probability of success.

• Why proper strike placement, not prediction, is where the true edge lives.

This isn’t another “RSI hack.” It’s a framework grounded in 24 years of real-world premium selling experience, one that helps you survive when RSI misleads you and thrive when it finally tells the truth.

🎯 Read the full article: How to Use RSI to Time Options Trades (Without Fooling Yourself), discover how professionals read RSI like a probability tool, not a prediction engine.

🔗 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