How we turned “renting volatility” into real dollars, using small, defined-risk option spreads instead of expensive stock positions.

We launched the Small Dogs portfolio with just under $10,000. By sticking to our mechanics, defined-risk credit spreads, disciplined deltas, quick profit-taking, it’s now up +39.9%. That’s about $3,881 in gains on a sub-$10k account, without buying a single share.

For context, the S&P 500 is up roughly +13% over the same window. Our approach delivered ~3.1× the index’s return (39.9% vs 13%) while keeping capital small, controlled, and repeatable. And that’s before counting positions in our other portfolios, which are up +34.5%, +75.1%, and +56.8%.

Most importantly, we’re not taking big swings at high-beta fliers. These results come from large, blue-chip names, using Poor Man’s Covered Calls (PMCCs), a capital-efficient, risk-defined approach that limits downside, recycles capital quickly, and lets consistency, not luck, do the heavy lifting.

Owning 100 shares is capital-hungry:

Instead, we rent the upside with PMCCs, buying a long-dated, deep-ITM call (our “synthetic shares”) and selling shorter-dated calls against it. Your capital at risk is the net debit (cost of the LEAPS minus the premium you collect), which is typically hundreds or low thousands, not tens of thousands.

Illustrative mechanics:
Buy a 12–18-month deep-ITM call (≈0.70–0.80Δ) for, say, $15.00 and sell a 30 to 45 DTE call for $2.00. Your net debit is $13.00 (=$1,300 per 1-lot). That structure gives you share-like exposure with defined capital, plus a steady stream of premium from the short calls.

Why it works in small accounts:

In short: PMCCs let you run the covered-call playbook, steady income and upside participation, without tying up $46k-$66k in stock. You can build positions in high-quality names for 65 to 85% less than buying shares outright, making real diversification achievable in a small account.

Stocks finished the week higher (S&P +1.7%, Nasdaq +2.1%, Dow +1.6%), but the tone was choppier: tariff headlines, an ongoing government shutdown, and renewed questions around small regional-bank credit sparked a defensive bid. The VIX pushed above 20 at times, Treasuries rallied (10-year to ~4.00%), and intraday swings widened, classic signs of a tiring advance rather than a broken market.

What moved markets

Why this still looks like a pause, not a peak

What to watch next week

Bottom line: The tape looks tired, not terminal. Expect chop. Use volatility to rebalance and keep a quality bias while you wait for better entries.

🗓️ Tuesday, October 14th - Poor Man's Covered Call: How to Choose the Right Strikes

🗓️ Thursday, October 16th - Iron Condors & Butterflies: The Smart Trader's Guide to Probability-Based Income

(Educational and idea-generating for all readers)

Earnings week two is shaping up as a tidy demonstration of “event premium” without the frenzy, this is often the quieter stretch before the calendar really accelerates. You can see the pre-announcement volatility build most clearly in a handful of names with high relative readings versus their own year: QuantumScape and Intel into mid-week after-close reports, plus Dow Inc. before the open and Newmont after the close on Thursday. That combination, elevated IV sitting alongside lofty IV Rank/Percentile, offers a clean, real-time look at how markets price a wider distribution of outcomes ahead of results, and how that risk is set up to normalize once the numbers are out.

It’s also a good week to contrast absolute versus relative volatility. Tesla’s headline implied sits in the 60s, but its IV Rank and Percentile are mid-pack for Tesla, signaling options that aren’t especially rich by its own standards. Meanwhile, steadier names like Coca-Cola and AT&T show the opposite profile: modest absolute IV, but high percentiles that speak to meaningful relative event premium in quieter tapes. Halliburton slots into that “quietly elevated” bucket as well, where sector-specific uncertainty, not just beta, is doing the lifting.

Finally, liquidity and timing help explain how the repricing shows up on the tape. Ultra-liquid chains like Tesla and Intel tend to display crisper markets and more visible post-event volatility adjustments. After-close schedules (e.g., QS, TSLA, INTC, NEM) often reveal the shift from the close into the next session’s open, while before-open reports (CLF, HAL, KO, T, AAL, DOW, FCX) showcase the adjustment right at the bell. Put together, with week two’s typical lull before the heavier hitters crowd the calendar, this is a compact, useful snapshot of how uncertainty is priced and then released as the season gathers pace.

🧭 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.

Options quietly publish the market’s best guess of how far a stock is likely to travel by a given date. That guess is called the Expected Move (EM).

If a stock is $100 and the 1-week EM is ±$5, the options market says, “Most of the time, by next week this should end up somewhere between $95 and $105.” It’s a typical range, not a promise.

Why it matters

Quick rules of thumb

Use it like a pro

Bottom line: Treat EM as a map of likely paths, not a destination. It keeps your strikes realistic, your sizing disciplined, and your expectations aligned with what the market is actually pricing.

This week’s Options 101 article focuses on the one principle that quietly decides every trader’s fate, how much you risk, not what you trade.

Most beginners obsess over finding the perfect setup. Professionals obsess over survival. The piece explains why risking small, 1-5% per trade, isn’t playing it safe, it’s building longevity. You’ll see how simple math, discipline, and consistency protect both your capital and your mindset when the inevitable losing streak arrives.

It’s not about predicting the market or chasing excitement. It’s about making sure you’re still standing to trade the next opportunity.

Takeaway: Position sizing is what keeps traders in the game long enough for skill and strategy to matter. It’s not caution, it’s professionalism.

👉 Read this week’s Options 101 article to learn how proper position sizing transforms trading from speculation into a repeatable process built for long-term success.

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

Great traders and great poker players share the same mindset, they focus on probabilities, not predictions. You can make the right decision and still lose; what matters is the quality of the process, not the outcome of one hand or one trade.

Like a poker player protecting their chip stack, traders must size positions to survive inevitable losses and avoid emotional “tilt” after setbacks. Your setup is your hand, and the market is your table, know when to play, when to fold, and when to sit out.

Takeaway: Trading success isn’t about being right, it’s about making good bets over and over again.

👉 Read the full article to learn how thinking in bets can make you a more disciplined, probability-driven trader.

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

New this week, more helpful trader metrics: I’ve added ADX/DMI alongside the IV and RSI set.

Volatility is back. VIX = 20.78. Across major ETFs, many IV Ranks sit in the 30–100 range, while short-term RSIs are mixed. That’s a good backdrop for defined-risk premium selling, but with discipline: wider wings, sensible deltas, and fast profit-taking.

Why these? Premium is rich (high IVR), trend strength is real (ADX ≥ ~30 in most), and buyers lead (+DI on top). You’re paid to sit farther OTM with the tape.

Seller’s play: Bull Put Spreads, 30–45 DTE, short 10–12Δ (especially when ADX is high), target 20–30% of width in credit, exit 40–60% or 21 DTE.
Buyer’s angle: If you play debits, bias to breakout/continuation (e.g., call diagonals/calendars) rather than fading.

Why these? Momentum is soft (RSI14 sub-50), sellers lead (–DI), and call premium is often attractive when IVR ≥ 30.

Seller’s play: Bear Call Spreads, 30-45 DTE, short 10-12Δ above supply, 20-30% credit, exit 40-50% or 21 DTE.
Buyer’s angle: If you buy options, keep risk tight (put calendars/diagonals) and don’t chase until DMI flips.

Seller’s play: Iron Condors, 35–45 DTE, 12-15Δ each side, 25-30% of width in credit, exit ~50%.

Delta & width with ADX:

What RSI adds:

IBIT (0.5), URA (16.6), USO (21.1), XOP (21.6), XLB (22.9).

How to use (with ADX/DMI):

GLD (RSI14 75), XBI (RSI14 74), SLV (RSI14 68), XLV (RSI14 62), XLP (RSI2 80.9).

How to use (with ADX):

VIX 20.78 with firm 9-14-day momentum = sticky vol.
Implications for execution:

👉 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.

Over 20 years of teaching, I've noticed a recurring challenge: dividend portfolios yielding 3-4% often fall short of retirement income needs, yet moving to riskier assets isn't appealing. This week's article examines an alternative approach, using covered calls and Poor Man's Covered Calls (PMCCs) on the same quality stocks dividend investors already own.

What the article covers:

Sarah Martinez, a financial analyst, built a $125,000 dividend portfolio yielding 3.2% annually. After implementing systematic options strategies, her yield increased to 18.2% over 18 months, same stocks, different income method.

The article walks through:

👉 Read the complete analysis

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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