Would you like to learn a strategy with an overwhelming likelihood of success which involves selling options using our technical approach?
At Master Trader, we use an objective, rule-based approach to trading stocks, futures, cryptocurrencies, options – and, yes, in selling options, particularly when volatility spikes.
Our Advisory Swing and Options Letter focuses on identifying high-probability long and short trades in stocks and options using Master Trader Strategies (MTS).
One of our favorite income strategies? Selling options and credit spreads—profiting from time decay and volatility contraction (a powerful edge many traders overlook).
Read about the Weekly Options Trader letter which sells options/spreads for weekly Income that expire in 10 days or less around Master Trader technical turning points, CLICK HERE. Last week we were nine for nine in trades recommended in this letter, and the prior week was 12 for 13.
We sell options and spreads as Income trades where we profit through time decay and volatility contraction. To learn this Strategy, CLICK HERE
When Volatility spikes – coupled with a bullish reversal in the SPY -- it is one of the greatest moments in the markets to reap huge profits by placing bullish trades on Index ETFs (such as selling puts and put spreads on the SPY and QQQ like we did, see below) and bearish trades on volatility options, futures, and ETFs (e.g., buying a put debit spread or selling calls like we did on the VXX, see last week’s Chart of the Week, Volatility Trading in Crashing Markets - Trade Setting Up Now).
We sell options/spreads around technical turning points and literally “get paid” to determine where a stock will not go in a short time.
Traders should add this strategy to their trading arsenal since the odds of profit – particularly after market mini-crashes -- are overwhelming high when they set up, like now.
Volatility is High - Let's Sell Some Options/Spreads on SPY!
The patterns using Master Trader Strategies (MTS) were very high-probability setups. Learn how to use MTS to time your entries to profit from selling options with charts with incredible accuracy. To learn our technical approach to trading anything that moves, CLICK HERE
Let’s look at the four trades we did just on SPY in the past few days (we did others on QQQ, VXX, and individual stocks for our advisory letter subscribers).
The broader markets have been in turmoil lately over the Trump tariffs, with many markets in bear market or correction territory. Volatility spiked to multi-month highs as a result, making it a great time to sell high priced options with the charts.
Option Selling Trade #1:
On 4/9, the SPY exploded higher, closing with a bullish Wide Range Bar (+WRB). That is bullish but because of rapid momentum move higher intra-day, it left a Void of Support below, allowing for intra-day bearish trading opportunities, which we capitalized on.
On 4/10, SPY gapped down, took out the 30-Min. low, bounced somewhat, and broke down again. That is where we recommended selling the 0 days to expiration (DTE) $530/540 bear call credit spread for $.73/share. Selling one contract would generate $73, or $730 for selling 10 contracts.
The premium received in each trade (one options contract represents 100 shares of the underlying) is pure profit if the stock expires worthless (below the short strike for short calls, or above the short strike for short puts, at expiration – a good bet using MTS.
Option Selling Trade #2:
Later that same day on 4/10, we were monitoring for a bullish reversal as SPY drifted lower into the +WRB Igniting bar from the following day.
That occurred precisely where shown with the second arrow, where we recommended selling the 0 DTE $475 puts for $.75/share, which expired worthless -- $750 profit on a 10-lot.
Two 0 DTE option selling trades in one day by calling the short-term top and bottom! But we’re not done yet.
Option Selling Trade #3:
One hour later after Option Selling Trade #2, we noticed the bullish retest (third arrow), where we recommended selling 1 DTE $495 Puts, which also expired worthless.
Option Selling Trade #4:
The following day, on 4/11, after a boring morning and lunch session where SPY traded in a range, it broke out where shown and we recommended selling the Apr (4/17) $470 puts (6 DTE) for $1.65/share, which is still an open position with an unrealized gain.
Once in a trade, we are in trade management mode, which is particularly important when selling options.
Management updates are sent intra-day by text message to subscribers.
All open and closed trades are documented in the subscriber member area. Intra-day, updates are texted to subscribers.
Money Management for Trading and Investing
Proper money management for investing and Trading starts with position-sizing based on the amount of money you are willing to risk on a signal trade.
