Tomorrow.
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I want to start with thank you. This newsletter has grown almost entirely by one reader telling another, which is the slowest way to build anything and the only way I wanted to do it. Every time you forward a Sunday piece or mention it in a group or a forum, you put your own credibility behind mine. I have never taken that lightly, and this rebuild is my attempt to give some of it back.
Nothing about your delivery changes. This newsletter arrives Sunday, same as always, in the same inbox, at the same price, which is nothing. If you do nothing at all, you keep getting exactly what you have been getting.
What is new is the site around it. Everything I have written on the education side is now in one library, organized the way I actually think about it. Options 101 for the foundations, the Wheel, credit spreads and iron condors, poor man's covered calls and LEAPS, and Mental Capital, which is the behavioral work. The research pieces that test whether a convention actually holds up are tagged and sit alongside the strategy they belong to. All of it free and searchable. I have also added each service to the navigation bar on the home page, so getting anywhere takes one click.
The community for paid subscribers is also open, though posting stays off for a few more days while I work through some things on the back end.
Webinars begin in October. Videos follow, and a few of those may land before the first webinar does. Courses come after that, built around the strategies I actually trade rather than around a curriculum somebody decided would sell well. A calendar of everything live goes on the community page. Some of it will be free and some of it will not, and I will say clearly which is which every time.
One ask. If something is off, tell me. A link that goes nowhere, a page that will not load, an article that will not open. I found and fixed more than a handful this week myself, and I would rather hear about the rest from you than not hear about it at all. Reply to this email, or write me at [email protected].
Thank you, thank you, thank you!
Now, to this week.
The committee that split three ways in July voted as one on Wednesday. The Fed raised rates a quarter point to a 3.75%-4.00% target, the first hike in more than three years, on a 12-0 vote, and the dot plot showed 16 of 19 officials expect at least one more before year-end. Kevin Warsh's press conference was short on guidance and long on inflation, stocks gave up their gains while he spoke, the Dow lost 631 points, and the 10-year yield topped 5%. Thursday the market bounced as oil fell on Saudi supply news, Friday was quadruple witching, and the S&P finished the week down all of 0.3%.
Here's the number that matters more than any of that. The VIX closed Friday at 14.81, down 6.5% for the week. The market just absorbed the first rate hike in three years, a promise of another one, and the quarter's biggest expiration, and insurance got cheaper. That's the appointment mechanism this letter has documented all season, on the year's biggest appointment: premium inflates into a scheduled event, the event arrives, the sellers collect. It never required the news to be good, only over. Wednesday at 2:00 PM, it was over.
And underneath, the story that put this letter on defense last Sunday got worse, not better. The short-term breadth reading fell again, from 39.65 to 34.02. The long-term reading, the percentage of stocks above their 200-day average, broke below 50 for the first time, to 47.95. Both lines are now broken. Meanwhile the Nasdaq 100 rose 0.9% on the week, AMD gained 8.5%, Intel 5.5%, and nine of the Liquid Ten now show relative strength above 50. The big names keep getting stronger while most stocks keep getting weaker. Last week's posture holds, word for word: smaller, defined, hedged, selective. Nothing about a 12-0 vote changed the math that put it there.
📰 What the Data Said This Week
Wednesday resolved three months of argument in one afternoon. Since July 29 this letter tracked September's odds through four full swings: hike-lean, cut-certain, hike again, 90% after CPI. The answer was a hike, without a single dissent from a committee that had three eight weeks ago, plus one more projected this year. The bond market took it seriously: the 10-year crossed 5% during the press conference. The stock market took it strangely: down hard Wednesday, up Thursday, flat on the week. Rates repriced. Stocks, so far, declined to.
The called shot from last Sunday landed. This letter wrote that TLT sat one tick from the sell zone and that Wednesday would resolve it. It resolved: 37.3% rank at the 70th percentile, and TLT is now a sell-zone name with a broken trend, the rich-and-broken kind you respect rather than sell. One more post-Fed reading: VIX options are back at the 75th percentile, the fourth loading of the year, with the VIX under 15. The tracker's record is two spikes called, one fade, and it's loaded again.
Friday's witching came and went as advertised: loud volume, quiet direction, plumbing rather than information. If you read last week's Did You Know, nothing about it surprised you. That was the point.
📅 The Week Ahead
A quiet calendar, which is its own information. Attention now turns to whether the second penciled-in hike arrives, and every print before the October meeting gets read through that lens. For sellers, the post-event stretch is usually the thin stretch: the appointment passed, the insurance expired, and patience is the position again.
📊 Weekly Market Stats
Where We Stand
Four situations define the post-hike board.
Energy still pays, barely. XLE (60.8% rank) and XOP (56.7%) remain the zone's core, but the trends cooled hard: XLE's gap fell to +0.4, XOP's to +6.8, as oil slipped on the Saudi news. Premium's still there; confirmation is fading. That's smaller and stricter, not walk away, and next week's readings decide.
Meta is the new Apple. META's premium climbed to a 49.8% rank at the 68th percentile, now the richest of the Liquid Ten, with no earnings until November. Apple, meanwhile, is finally normalizing: still a 40.7% rank, but the percentile dropped from 42 to 24, the first real sign its three-month premium is exhaling. The market's unscheduled-question watch has a new leader.
The income board, from Friday's screener. With index premium thin, the cash-secured put screener is where the ideas are, and it teaches the filter as well as it pays. Among liquid, quality names: Intel's October $100 put (27 days, 0.28 delta, 75.6% probability of profit, roughly 47% annualized), Micron's $940 put (75.3%), NVIDIA's $210 put (78.6%, about 19% annualized), Amazon's $240 put (79.3%, 16%). The screener's very top yields sit on speculative names, and that's the lesson: yield is the market quoting risk, not offering charity. The willing-to-own test does the filtering; this week's Educational Corner covers how.
The four still trending. The Buy Zone holds 17 names and the same warning as last week: most are cheap because they're falling. The short list with trends intact: IBIT (+23.3 gap), SMH (back above 50, +6.0), XLK, and gold, whose relative strength quietly repaired to above 50 this week at a 23% rank. Everything else in the zone is a symptom, not a sale.
📰 This Week's In-Depth Articles
Tuesday's piece is the assembly manual most options content skips: not one trade, but how the trades fit together into a portfolio that pays monthly. How much capital each strategy gets, how many positions is enough, how the Wheel, credit spreads, and covered calls share one account, and the honest math on what a given account size can produce. If you've learned the strategies one at a time and wondered how they combine, this is that article.
Thursday's piece is the defensive tool for this exact tape: the bear call spread as protection. When breadth breaks but you don't want to sell your holdings, a call spread sold above a weakened index collects premium that cushions a decline. The article covers strike selection off the expected move, sizing it as a hedge rather than a bet, and when it helps versus when it costs. With both breadth measures below their lines, the timing writes itself.
🎓 Options 101: The Law of Large Numbers
The foundation article is live, and it's the one this whole letter runs on. A 75% win rate does not mean winning three of every four trades in order; over ten trades it can look like anything from 61% to 89%, and it takes about a hundred before your results reliably resemble your real edge. The article puts hard numbers on the convergence, works a fully priced 79% probability spread on SMH so you can see where the odds come from, and shows why the edge lives in the chain's delta, not anyone's opinion. Read this one before trading another dollar.
🧠 Mental Capital: The Collar
The hardest part of a year like this one isn't finding gains. It's keeping them without selling, and the collar is the tool built for exactly that seam. Own the shares, sell a call above the market, use that credit to buy a put below it, and you've turned an open-ended position into a defined range, often at little or no net cost. With the S&P up 11.7% on the year, both breadth measures broken, and index insurance still cheap, the setup for collars rarely gets better than this. The article walks the full construction, both strikes, the zero-cost version and its honest trade-offs, and when a collar beats both selling out and holding on with your fingers crossed.
📐 Educational Corner: The Best Stocks for the Wheel
The income board above gives you this week's candidates. This article gives you the filter that picks them every week after. The Wheel only works on stocks you'd genuinely hold, which rules out most of what a yield screener spits out. The tests: business quality you can explain in a sentence, tight liquidity, volatility high enough to pay but not high enough to signal trouble, and a price you'd defend with conviction. It also names the traps, the 60% annualized yields on stocks you'd panic-sell at the first gap down. Premium is rent. Only collect it on property you'd want to own.
💡 Did You Know?
"Don't fight the Fed" wasn't coined by the Fed. It was popularized by the analyst Martin Zweig in his 1986 book Winning on Wall Street, alongside its companion: "Don't fight the tape." Zweig practiced what he preached, famously warning of a crash on national television days before October 1987. His two rules were really one idea: when monetary policy and market internals agree, respect them over your opinions.
This week is the rare tape where both rules point the same way. The Fed just hiked, unanimously, with another penciled in. The tape, measured by breadth, has both readings below their lines. The only thing disagreeing with Zweig's rules right now is the cap-weighted index itself, held up by a handful of giants. Zweig's rules don't predict what happens next. They just tell you which side deserves the benefit of the doubt, and this week, it isn't the optimistic one.
📊 The Implied Truth: ETF Watchlist
The Weekly ETF Volatility and Trend Intelligence Report
🔟 The Liquid Ten
META took the top spot at 49.8% with the 68th-percentile persistence Apple used to own, while Apple finally started to normalize. AMD gained 8.5% to $560, Intel reached $108.60 (+194% on the year), and NVIDIA sits at a 4.5% rank, still the group's cheapest options. Nine of ten names now trend above 50 while two-thirds of the broader market doesn't. The crowding didn't ease after the hike. It tightened.
The Sell Zone: Five Names, Two Worth Selling
XLE (60.8% / 69th) and XOP (56.7% / 66th) still pair premium with positive trends, though both gaps narrowed hard this week. XLV re-entered at 50.5% but its trend slipped below 50, XLI remains the broken-trend trap it's been for a month, and TLT arrived at 37.3% / 70th with bonds in a downtrend, rich for a reason. Two sellable, three warnings. The dual filter's whole job is telling those apart.
The Income Board: This Week's Cash-Secured Put Screen
New this week, and a permanent addition: the highest-quality setups from Friday's put screener, filtered for liquidity, probability, and names that pass the willing-to-own test. The full screen runs 288 rows; the board shows what survives the filter. The Educational Corner above explains why most of the other 280 don't.
The Buy Zone and the Trend Picture
Seventeen names qualify as cheap; four also qualify as trending: IBIT, SMH, XLK, and GLD, whose quiet repair above 50 at a 23% rank is the sleeper reading of the week. The broken column runs twice the leaders' length: small caps at a -27.2 gap, the equal-weight index at -25.3, the Dow at -21.8. Cheap options on falling assets are a warning, not a sale. The four names are the shopping list.
The Indexes and Breadth: Both Lines Broken
$MMFI: 34.02, from 39.65. $MMTH: 47.95, from 51.68, below 50 for the first time. The majority of stocks now sit below both their 50-day and 200-day averages while the S&P sits 3% from its record. The posture called last Sunday stays exactly as written: smaller, defined, hedged, selective. The line at 50 remains the switch, a long way overhead, and when it's reclaimed this letter prints it that Sunday. Until then the tape is bearish underneath.
The Bottom Line
The Fed hiked without a dissent, promised another, and the options market marked insurance down, because the appointment passed and appointments are what premium is made of. Underneath, the split widened: nine of the ten biggest names trending higher, both breadth measures below their lines. Nothing this week argued for changing the posture, so it doesn't change: sell the two energy names while their trends hold, respect the three warnings wearing rich premium, work the income board on quality names only, hold the hedges, and keep size small enough that the law of large numbers stays on your side. The chart flipped this letter to defense eight days ago. It decides when we go back, and it hasn't yet.
A Quick Note
This is the last issue published from the old site. Tomorrow morning the new Option Premium opens, and next Sunday's letter arrives from it. To everyone who read, replied, pushed back, and forwarded this letter while it was still just a Sunday email: the new place was built on your questions, and you'll recognize your fingerprints all over it.
If this issue taught you something, forward it to one person trying to learn options from services that promise everything and teach nothing. That's still the only way this publication grows, and that doesn't change tomorrow either.
See you next Sunday! And thank you, thank you, thank you for being here!
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.