Before We Get Started…

Last week’s testimonials hit me right in the chest, in the best way. Thank you for the loyalty, and for taking the time to share what’s actually working for you.

Here’s why that matters: most options newsletters are built to sell excitement. I’m building this one to sell something less flashy, but far more valuable over time, a repeatable, disciplined, realistic process.

And I don’t mean that as a slogan. I’ve traded options professionally long enough that this isn’t theoretical for me. This is the work that’s paid for real life…mortgages, college tuition, family expenses, vacations, the whole deal. Which is exactly why I’m stubborn about one thing:

There’s no magic trade. There’s no “one setup” that makes this easy.

At some point every trader has to choose what game they’re playing. You either treat options like a casino, or you treat it like a business…built on probabilities, position sizing, the law of large numbers, and volatility-aware decisions. Strategies matter, sure. But they’re not the main thing. The main thing is whether your approach holds up mathematically over time, across different markets, without you constantly improvising or “managing” yourself into exhaustion.

That’s the lane I’m in, and that’s what I’m trying to give you here.

So no, this isn’t “call the top.” It’s not “this one trade will change your life.” It’s a premium-selling playbook for the real world: structure, sizing, clear rules, and honest expectations, with transparency, especially when things don’t go perfectly.

And one more point, because it says a lot about the kind of community this is: the growth of The Option Premium and the paid services has been 100% organic. Traders and investors sharing it with other traders and investors. And I truly appreciate it! No hype machine, just people passing along something they found useful.

If you feel like this has helped, the best way to support it is simple: share it with one person or one group this week…Facebook, Reddit, X, LinkedIn, Discord, wherever you think it might cut through the noise. That’s how this grows: one trader at a time.

Now, if you’ve been thinking about joining the paid services, that’s where the process gets fully implemented, not just explained.

You’ll get the full portfolio playbooks: how I size positions, how I spread risk across strategies and expirations, what I’m willing to trade (and what I’m not), and how I manage the boring middle…the exits, the rolls, the adjustments, and the weeks where the smartest decision is to do less.

You’ll also get the real-time layer that’s hard to capture in a weekly write-up: what I’m watching right now, what would actually change my view, which Greeks/levels matter this week, and when the smart move is to take the small win and move on. It’s the same process you see in the free newsletter…just deeper, more specific, and synced to the market as it moves. And at this point, the ongoing testimonials and the track record can do the talking.

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📰 Market Commentary & Snapshot

This was one of those weeks where nothing “broke”, but the market quietly changed what it’s willing to pay you for.

The indexes are still holding together. But the best premium isn’t sitting in the same places it usually does. And if you kept selling the same underlyings with the same strike distance out of habit, you probably felt that friction: the market is tradable, but it’s paying you very differently depending on where you show up.

Here’s the clean read from this week’s numbers:

1) Energy is the paid trade - and it’s getting crowded

USO / XLE / XOP are where the market is paying right now. Premium is higher and momentum is strong.

That’s the good news. The bad news is what usually follows: premium sellers start “reaching” because the credit looks easy. Tight strikes. Bigger size. Less room to be wrong.

Options takeaway: In paid + trend names, the edge isn’t being bold, it’s being boring on purpose. Go farther OTM, keep size small, and lean on defined-risk when the chart is sprinting. If the move reverses, you want the position to bend, not snap.

2) Metals are still expensive - but the tape shifted

GLD / SLV / GDX are still priced like the market expects movement. Options are expensive.

But momentum cooled off hard. That’s what crowded trades do: they don’t drift lower in an orderly way. They snap, and they usually snap when premium sellers are sitting too close.

Options takeaway: This is “paid but violent.” If you trade it, trade it like it can move 5 to 10% quickly: defined-risk only, smaller size, faster exits, and no tight strikes just because IV is high. High IV is the market telling you the ride can get rough.

3) Index premium is still thin

SPY / DIA / QQQ / VTI are still relatively calm. That doesn’t mean they can’t move, it just means you’re not getting paid much to sell insurance close to spot.

Options takeaway: When premium is skinny, your edge comes from structure, not aggression. Keep it defined-risk, give yourself wider wings / more distance, trade smaller, and take profits earlier. In low-premium markets, the goal is to get paid without turning every position into a management project.

If you want the whole thing in one line: Energy is paying but crowded, metals are paying but whippy, and indexes are calm but cheap, so trade distance, defined risk, and structure accordingly.

Looking Ahead: The Week’s Macro Risk

This week has a few “volatility magnets,” mostly tied to U.S. data rather than Fed meetings:

• ISM Manufacturing (Mon)

• JOLTS (Tue)

• ADP Employment (Wed)

• ISM Services (Thu)

• Jobs Report / Nonfarm Payrolls (Fri)

And just so your calendar is clean: the next scheduled FOMC meeting is March 17–18, 2026.

Practical takeaway: If you’re selling premium this week, act like the market can lurch on data when you least want it to. That means: farther strikes, smaller size, defined-risk, and quicker exits.

📊 Weekly Market Stats

📰 Weekly In-Depth Articles 

🗓️ Tuesday, January 27th: The LEAPS Collar: Protecting Your PMCC When Conviction Wavers

🗓️ Thursday, January 29th: Why Deep-ITM LEAPS Can Beat Stock for Income Strategies

🎓 Options 101: The First Steps to Trading

Most traders hunt for an edge like it’s a hidden indicator.

But one of the most durable edges in markets has been sitting in plain sight for decades: options are usually priced for more chaos than actually shows up. Implied volatility tends to overstate realized volatility, because investors consistently overpay for insurance and “lottery ticket” upside.

That doesn’t mean premium selling is free money. It means there’s a persistent structural tailwind for the seller, if you trade small enough to survive the inevitable drawdowns and clusters of losses.

This week’s Options 101 is built to give newer traders the “why,” not just the “what,” so they understand what they’re really harvesting when they sell a put spread, iron condor, covered call, or cash-secured put.

This week’s focus inside the article:

• why the volatility risk premium exists (and why it keeps showing up)

• why premium selling works best over a large sample, not a heroic week

• why early exits (profit-taking + avoiding late-cycle gamma) are part of the edge, not a footnote

👉 Read the full article: Academic Research Shows the Long-Term Edge in Selling Options Premium

🧠 Mental Capital

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

A lot of traders treat hedges as the solution.

But here’s the uncomfortable truth: hedges don’t fix an oversized portfolio.
They just make the eventual unwind a little more organized.

The thing that quietly determines whether any hedge works, and whether you can actually stick with your process when volatility shows up, is position sizing. Sizing is the only risk tool that improves every strategy at the same time. It makes your Wheel positions survivable. It keeps PMCCs calm. It makes spreads repeatable instead of episodically terrifying.

This week’s Mental Capital piece is about building a portfolio that doesn’t require heroics. The “thermostat” idea is simple: you install rules that automatically reduce risk when conditions deteriorate, before you’re forced to trade emotionally.

What you’ll walk away with:

• the 4 quiet ways traders accidentally run “too hot”

• a simple weekly risk scan that takes 10 minutes

• a sizing framework based on max loss and portfolio impact, not vibes

👉 Read the full article: The Risk Thermostat

📊 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.

This Week's Clean Read

1) Index premium is still thin

Across SPY / DIA / QQQ / VTI, IV Rank is still low. Translation: the market is not charging much for insurance.

That doesn’t mean indexes can’t move. It means you’re not getting paid much to stand close to spot and sell it.

What that implies for premium sellers: When premium is thin, the edge comes from structure, not “getting closer.” If you sell too tight in skinny-premium environments, you’re basically writing cheap insurance with little margin for error.

2) Energy is where the market is paying

USO / XLE / XOP have the clearest “paid + momentum” look this week: premium is elevated and trend strength is obvious.

This is where traders get themselves in trouble—because rich premium makes tight strikes feel “safe.” They aren’t. They’re just paid.

What that implies: In paid + trend environments, you’re being paid because the market expects movement. Your job isn’t to maximize credit. Your job is to survive the movement.

3) Metals are still expensive…but the tape got shaken

GLD / SLV / GDX are still expensive on implied volatility, but short-term momentum cooled hard. That combination is a warning label.

It’s the classic “crowded trade” footprint: options are rich, positioning is tight, and when momentum breaks, it doesn’t drift, it snaps.

What that implies: This is where premium sellers get punished for tight strikes and oversized positions. If the product is “paid” and the tape is “violent,” you should assume you can get a fast move against you even if the long-term trend is still intact.

4) VIX is stretched short-term

VIX itself looks like a short-term flare-up. That matters because VIX doesn’t need to “be high” to make short-premium positions feel uncomfortable, especially if you’re too close to spot or too big.

What that implies: This isn’t necessarily a new volatility regime. It’s more like a reminder: volatility can wake up without giving you notice. That’s why distance and defined risk matter even when “the market looks fine.”

Quick Cheatsheet: This Week’s Premium Buckets

1) Underpaid (indexes / thin IVR): Not getting paid to be close. Trade smaller + wider + defined-risk. Take profits faster. Don’t chase max credit.

2) Paid + Trend (energy right now): Premium is rich because movement is likely. Trade farther OTM, give it time, favor wide spreads/condors, and keep size humble.

3) Paid but Violent (metals right now): Expensive options + whippy tape. Defined-risk only, smaller size, quicker exits. Tight strikes get punished.

4) Paid but Weak (needs stabilization): Premium isn’t awful, but the chart hasn’t earned your confidence. Require stabilization, structure so you can be early without getting hurt, and keep risk contained.

One-line rule for the week: Trade the bucket, not the ticker, distance in trends, defined-risk in violence, structure in thin premium.

👉 For a deeper dive each week, including a full breakdown of the most liquid optionable ETFs and an in-depth analysis of 100+ highly liquid equities, check out The Implied Perspective, our paid service that turns this data into structured, high-probability premium ideas.

As always, this section is meant to be an educational lens on the current landscape, not personal advice. The edge comes from matching the strategy to the regime, keeping position sizes small, and letting a large sample of disciplined trades do the heavy lifting over time.

Quick Reference

📚 Educational Corner: Options Deep Dive

This is the kind of case study most newsletters avoid.

Not because it isn’t valuable, because it’s messy.

A PMCC can look clean on a chart and still require real-world management: buybacks, rolls, timing decisions, and the occasional “yes, this call got run over” moment when the stock trends harder than expected.

That’s why this review matters. It’s a real trade with real numbers and real warts, and it shows why PMCCs can be a “dividend replacement” machine when you treat capital efficiency as a risk tool, not permission to oversize.

This is the “show your work” version of what most covered-call content hand-waves.

Inside the review:

• the full mechanics: long LEAPS + short call overlay

• how the income layer actually adds up (including the painful rolls)

• why the real edge is return on capital + staying power, not “maximizing premium”

👉 Read the full article: JNJ PMCC Strategy Review: How One LEAPS Position Produced 93% “Dividend Replacement” Income While the Stock Gained 32%

⁉️ Did You Know?

RSI tells you stretch. ADX tells you whether that stretch is tradable or dangerous.

Last week we talked about the RSI stack (2D/5D/9D/14D) and the “gaps” between short-term momentum and the underlying trend.

This week is the missing layer that makes that framework usable for premium sellers:

• RSI answers: How stretched is it?

• ADX answers: Is the trend strong enough to ignore that stretch?

Same RSI reading. Two completely different realities, depending on trend strength.

The mental model (simple, not cute)

Think of RSI as a rubber band.

• RSI(2) extreme = stretched rubber band

• ADX = what the rubber band is attached to

If ADX is strong and rising, that rubber band can stay stretched longer than tight strikes can tolerate. If ADX is weak or falling, stretch tends to mean snapback risk increases.

This is why traders get surprised: they see RSI extreme and expect a reversal…then a strong-trend tape keeps grinding and their strikes get run over.

The 4-box framework: RSI Gap × ADX

You don’t need math-heavy rules. You need the right bucket.

1) Big RSI gap + High ADX = “Sprint in a strong trend”
Translation: acceleration + real trend authority. Premium-seller reality: “easy” credit becomes a management project when strikes are too tight. What tends to work better conceptually: distance, defined-risk, smaller size, quicker profits.

2) Big RSI gap + Low/Flat ADX = “Stretch without trend authority”
Translation: stretched, but the trend doesn’t have the power to bully gravity. Premium-seller reality: mean reversion risk is real, and the tape can whip. Often the best move is patience, let the move stabilize before choosing expression.

3) Small RSI gap + High ADX = “Healthy trend grind”
Translation: strong trend, but not manic short-term behavior. Premium-seller reality: often “cleaner” price action, less snapback than the sprint scenario, less chop than low-ADX regimes. This is where structure + time can actually do their job without constant adrenaline.

4) Small RSI gap + Low ADX = “Chop / range / drift”
Translation: no major stretch, no major trend, just a box. Premium-seller reality: tight strikes feel safer… until a sudden move reminds you why premium exists.

Goal: get paid, don’t get cute. Structure matters more than conviction.

The layer most traders skip: “Are you being paid for this risk?”

RSI and ADX tell you what the tape is doing. IV Rank / IV Percentile tells you whether the options market is pricing that risk expensively or cheaply.

A useful weekly question: “Is this a high-risk tape with low pay… or a high-risk tape with high pay?”

• Violent tape + thin premium → distance and structure matter more

• Violent tape + rich premium → you can get paid, but the premium is rich for a reason

This is the difference between premium selling and being the insurer standing too close to the house fire.

A quick weekly checklist (a lens, not advice)

When you look at a ticker/ETF, ask:

1. Is 2D strength running away from 14D? (stretch)

2. Is ADX rising and above the “trend is real” zone? (authority)

3. Is IV actually elevated enough to justify the risk? (pay)

Answer those three and you’re rarely confused about what bucket you’re in.

Why this matters (premium-seller version)

Most “bad” premium trades don’t start as bad trades.
They start as normal trades entered with the wrong assumption:

• treating a trend tape like a range tape

• treating a violent tape like a calm tape

• treating rich premium like “free premium”

RSI gives you stretch.
ADX tells you whether that stretch is a warning sign or trend fuel.
IV tells you whether you’re being compensated.

Coming soon: I’ll go deeper on this (and a lot more) in the courses I’m building for February.

🔗 Let’s Stay Connected

Have questions, feedback, or just want to say hello? I’d love to hear from you.
📩 Email me anytime at [email protected]

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💌 Send me your topic requests, whether for the newsletter, YouTube, or webinars. Seriously, send them. 🙂 

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

Educational use only. The Option Premium is a publication for educational purposes and does not provide personalized investment advice. Options involve risk and are not suitable for all investors. Always confirm details and manage risk prudently.