📩 The Option Premium Weekly Issue - October 18, 2026

It has been almost 18 months since I officially started The Option Premium. Some weeks that feels like 18 days, some weeks 18 years. What hasn't changed is how much your notes mean to me.

I read every one. Some of you write to say a section finally made something click. Some of you write to tell me I got something wrong. Both make this letter better, and both tell me you're reading closely. No writer gets a better compliment.

The idea behind this was simple. A high-quality newsletter that treats readers like adults: real strategies from almost 25 years of professional options trading, every trade shown, losses included, no dream for sale.

Premium sellers talk a lot about compounding: a small edge, repeated, quietly adding up. This letter has grown the same way. There's no big marketing machine behind it. Nearly every reader here arrived because someone passed it along.

So if this letter has been useful to you, I'd be grateful if you'd do the same. Forward it to a friend who keeps asking you about options. Share it with an investing group, a community, or a forum you trust. One forward at a time is how this has always grown.

Two things happened this week, and they pulled in opposite directions.

The first was inflation. September CPI rose 0.6% for the month and 3.7% over the year, above the 3.6% expected and up from 3.4%. Thursday's producer prices were worse. The 10-year yield, which had been falling, climbed back above 5.1%. The Fed meets October 27 and 28, and this print made a second hike harder to argue against.

The second was the AI trade, and it broke. The question shifted from how much demand there is for computing power to how the buildout is being paid for. Scrutiny of one heavily indebted AI infrastructure company spread to the whole group. Semiconductors fell 10.5% on the week, the technology sector 7.7%, and the Nasdaq 100 5.5%. Micron dropped 14.6%, Intel 14.2%, AMD 13.1%, Dell 22.9%, Super Micro 24.4%. Palo Alto Networks fell 18.3% and CrowdStrike 17.3%.

Here's what the headlines missed. The Dow gained 0.6%. Energy rose 4.9%, consumer staples 5%, health care 3.5%, retail 3.5%, materials 3%. Coca-Cola gained 6.6%, Walmart 6.7%, Home Depot 6.5%, Chevron 6.1%, Procter & Gamble 5.4%. Oil jumped 9.2%. This was not a market selling everything. It was a market selling one thing and buying another.

The VIX finished at 19.99, up 35% on the week. And breadth, which had just started to improve, gave it back. The share of stocks above their 50-day average slipped from 28.95% to 28.28%. The 200-day measure fell harder, from 43.33% to 41.51%. Last week I said one uptick was a twitch, not a trend. This week proved it.

For premium sellers, the practical change is simple. Last Sunday, four ETFs passed the dual filter. This Sunday, ten do. The stock list went from 49 names passing to 59. Premium got expensive across the board, and the only question that matters now is which of it is worth selling.

The reports that matter most to this watchlist start now. Tuesday brings Tesla, Meta, Texas Instruments, AT&T, and Las Vegas Sands. Monday is Netflix and GE. Thursday is Procter & Gamble. Blackstone reports Wednesday. Next week it's Apple, Microsoft, Alphabet, Amazon, Coca-Cola, Merck, Chevron, and Exxon.

Meta is the one to watch for the mechanism. Its IV Rank sits at 64% at the 89th percentile, with the report Tuesday after the close. Whatever Meta says, its premium will be sharply lower Wednesday morning. That's the appointment paying out. The rule stays the same: no new standard structures through a report.

The AI names got cheap and expensive at the same time. Intel's IV Rank went from 28% to 36% as the stock fell 14%. Nvidia's went from 18% to 41% on a 7% drop. Palo Alto's reached 65% at the 84th percentile. Three weeks ago I wrote that a stock dropping hard without its options getting more expensive meant the market treated the move as finished. This week the options did get expensive, which is the other reading: the market isn't treating this as finished. Rich premium on a stock with a trend gap of -18 is the trap, not the trade. The time to look at these names is after the trend repairs, not while it's breaking.

Merck's options hit a reading I rarely see. IV Rank 100%, IV Percentile 100%. The most expensive its options have been in a year, on every measure, with the report October 29. Coca-Cola is at 84% and 91st, Home Depot at 83% and 91st, Chevron at 79% and 83rd. All four are in uptrends. All four report inside the next five weeks. That's the earnings mechanism loading on the defensive names, the same way it loaded on tech a month ago. Rich, trending, and dated. The date is the reason for the premium, and it's the reason to wait.

Walmart, again. It was last week's cleanest setup on the stock list, and it rallied 6.7% to $118.81. The IV Rank climbed to 66% at the 84th percentile, the trend gap is now +33, the widest on the entire board, and the report doesn't land until November 19. For the November 20 cycle, a strike near $107.50 sits outside the expected move with about 84% odds. The willing-to-own test applies, and the November 19 date sits one day inside that window, so anyone selling it is selling through the report. Say that plainly before the trade, not after.

The Weekly ETF Volatility and Trend Intelligence Report

👉 Access the Watchlist →

Nine of the ten now pass the dual filter. Only Micron doesn't, and that's because its October report already let the air out: a 10% rank at the 5th percentile, even after a 15% drop. Everything else is loaded. Apple leads at 67% and the 75th percentile, Alphabet at 65%, Meta at 64% at the 89th, Amazon at 62%.

But look at the trend column. Apple, Meta, and Microsoft held their uptrends through the week. Nvidia, Intel, AMD, and Micron did not. Same premium reading, opposite trend readings, and that's the whole difference between a name that belongs on a put-selling list and one that doesn't.

The zone more than doubled this week, and most of what joined it is a warning. QQQ at a 52% rank, XLK at 48%, biotech at 58%, emerging markets at 38%: all rich because they're falling, all with trend gaps worse than -13. The Nasdaq is the most expensive it's been to insure all year, and it's expensive because the selling isn't over.

The three that pair premium with a trend are the same three that led last week, and they got stronger. XLE sits at a 57% rank with a +12.9 gap. XOP is at 62% and the 76th percentile with a +14.9 gap. Health care is at 66% and the 86th percentile with a +15.8 gap, up from +3.9 last week. Through November 20, the expected range is roughly $63 to $74 for XLE, $179 to $221 for XOP, and $166 to $187 for XLV. A short put below the bottom of any of those ranges carries about 85% odds. These are the only three ETFs on the board where the market is paying well and the chart agrees.

TLT is the oddity. Its rank is 72.5% at the 94th percentile, and for the first time in two months its relative strength crossed back above 50 as yields pulled back from their highs. The trend gap is still slightly negative. Not confirmed yet, but it's the closest bonds have come all autumn.

This week's board moves to the November 20 expiration, 34 days out, back inside our normal window. Every name on it either has no earnings or reports after November 17, and I've flagged the two that fall inside the last three days. Strikes sit at the one-standard-deviation line.

The board is built from the three confirmed ETFs plus Disney and Home Depot, both of which pass the dual filter with strong trends. Disney reports November 17 and Home Depot November 17, both three days before expiration. That's the trade-off: the rich premium on those two is partly the report.

Last week's board, one week later. This is the week the Income Board showed its teeth. Microsoft's $495 put sits 7% above the strike, about 86% odds. Meta's $640, 11% and 88%. Disney's $100, 11% and 94%. And Cisco's $105 put is in trouble: the stock fell 9.3% this week and sits 2.3% above the strike, with odds near 59%. Four weeks ago this letter said the willing-to-own test exists for weeks like this one. Cisco is that week. Anyone who sold that put is about to find out whether they meant it.

The October 30 board from two weeks ago. Palo Alto's $340 put is the hard one: the stock fell 18% and now sits $2 above the strike, a coin flip. Microsoft's $470 and Meta's $640 are fine.

Eleven ETFs qualify as cheap, down from sixteen, because premium rose across the board. Two trend: oil (USO) with a +23 gap after a 9% week, and financials (XLF) at +10. Everything else in the zone is falling: small caps at -25, uranium at -26, silver at -20, and the total market fund at -14.

SPY left the Buy Zone this week. Its rank rose to 25% at the 56th percentile. Index insurance is no longer cheap. And VIX options, which jumped to the 77th percentile last Sunday a week before CPI, sit at the 72nd now with the VIX at 20. Whoever bought protection last week bought it at the right time.

$MMFI: 28.28, from 28.95. $MMTH: 41.51, from 43.33. The one-week uptick reversed, and the long-term reading made a new low for the move. Both lines broken, both pointing down, with the S&P 2.4% from its high. The posture holds: smaller, defined, hedged, selective. The line at 50 is still the switch, and it's further away than it's been since this letter went on defense in September.

👉 How the Stock Market Behaves Before and After Midterm Elections →

👉 Building a Recession-Resistant Portfolio with Poor Man's Covered Calls →

Tuesday's piece lands sixteen days before November 3. The midterm pattern is one of the most consistent in market history, and the article covers what it says, what it doesn't, and why a premium seller should care about the volatility around the date more than the direction after it.

Thursday's piece builds a poor man's covered call portfolio on the names that hold up when the economy doesn't: staples, health care, utilities. After a week when exactly those sectors led while tech fell, it reads less like theory and more like a description of the tape.

Sell a call above the market, buy a cheaper call above it, and keep the difference. It's the mirror of the bull put spread, and the two together make an iron condor. The article runs a full example on an $85 stock: a $75 credit, a $425 maximum loss, a $90.75 breakeven, and when to use it instead of its bullish twin. With the Nasdaq's premium at a 52% rank and its trend broken, this is the structure the week was built for.

👉 The Bear Call Spread: Profiting from Weakness Without Going All-In →

Four Greeks, four plain questions. How much does the option move per dollar of stock? How fast does that change? How much does it move per point of volatility? How much does it lose per day? The article answers each one and then puts all four on a single cash-secured put so you can see them working together. If you've ever been right on direction and still lost money, the vega section explains why.

👉 Delta, Gamma, Vega, Theta: The Only Greeks You Actually Need to Know →

This is the article behind every Implied Truth table. IV Rank asks where today sits inside the year's range. IV Percentile asks how often the year looked like today. They can disagree by 68 points on the same day, and the article shows exactly how that happens and which one to trust when it does. Merck at 100 and 100 is the rare case where they agree completely. Micron at 10 and 5 is the other.

👉 How to Read (and Use) IV Rank and IV Percentile Without Getting Confused →

The VIX closed Friday at 19.99. Its long-run average since 1990 is about 19.5. After two months of readings in the 14s, a VIX at 20 feels like a storm. It's actually the median weather.

That's worth remembering when the headlines say "fear spikes." A 20 VIX means the options market expects the S&P to move about 5.7% over the next month, up or down. That's ordinary. Ordinary is also where premium sellers do most of their work, because the premium is real but the panic isn't. The expensive, dangerous tape is a VIX in the 30s. This isn't that. It's the market pricing a normal amount of uncertainty for the first time since August.

Most people who are new to options think the money is made by being right about direction. It isn't. The October expiration cycle closed on Friday, and it's a good example of why.

Three trades were on the books for October: a bear call spread in JPMorgan, an iron condor in SPY, and an iron condor in Johnson & Johnson. All three were opened with short strikes outside the expected move, which means the market had to make an unusually large move for any of them to lose. It didn't. JPMorgan was closed in 11 days for 14.7% on capital at risk. SPY was closed in 19 days for 6.1%. J&J was closed in 25 days for 8.7%. Combined, 29.5%, an average of 9.8% per trade, or $164 at one contract per trade.

Here's the part worth studying. None of the three was held to expiration, and none was closed because of a market call. Two were closed because the spread had given back most of its value and the rule says take it. J&J was closed before its earnings report because the rule says we don't carry a defined-risk spread through an event that can gap the stock past the strikes. Three exits, all decided by rules written before the trades were placed, none decided by how anyone felt that morning.

For the year, the service has closed 30 trades: 26 winners and 4 losses. The cumulative return on capital at risk is 228.0%, or 7.6% per trade, with the average trade held about 20 days. The win rate is 87%. The break-even win rate for this mix of credits and widths is about 71%, so the edge is the 16 points between those two numbers, not the win rate on its own. Anyone can post a high win rate by selling far out of the money for tiny credits. The question is always whether the wins cover the losses with room to spare.

If you want to see how these trades are chosen, sized, and managed each week, with every closed trade in the ledger, that's what The Implied Perspective is for.

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The AI trade broke, the Dow rose, and the VIX finally reached its long-run average. Premium is rich almost everywhere now, which makes this the week to be most careful about what's rich for a good reason and what's rich because it's falling. Energy and health care are the three ETFs where the market pays well and the chart agrees. The Nasdaq and its sectors are the ones where it pays well and the chart is broken. Last week's Cisco put is the reminder that a cushion is a number, not a promise. Breadth reversed its one good week. The posture holds. Smaller, defined, hedged, selective, with the first real premium of the autumn finally on the board.

If this issue taught you something, forward it to one person who's trying to learn options the honest way. That's still how this letter grows.

See you next Sunday.

Probabilities over predictions,

Andy

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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.