The goal is simple this week. We have two open bear call spread positions at the moment which means our portfolio currently leans to the short side of things. This week, if the market cooperates, I plan to add some long exposure through a debit spread, or a bull put spread, to even out our deltas so our portfolio takes a more neutral stance. There is no doubt that the air is getting thin at these levels. But, as we have seen recently, just when you think the market might take a turn, the bulls make an appearance.

We are finally through March expiration and volatility continues to remain at low levels. Volatility is starting to perk up a little, but the VIX still sits below 15, at 14.41. Until we see a sustained push towards the 18 handle, we should expect to see market complacency rule the day. A return to more normal levels of volatility (18 to 22) would allow us to expand our positions. Until then, we patiently wait for Mr. Market, and more importantly, probabilities, to lead the way.

The S&P 500 (SPY) is up 8.3% YTD and 25.1% since its near-term low back on October 27, 2023. It can’t be argued that we are witnessing something well outside of normal distribution.


If we go back to October 27 and take a quick look at the probability of the current move, we can clearly see that the probability at the time for SPY climbing above 510 (SPY currently sits at 511.72) was 0.93%. That’s right – 0.93%! So yes, again, this is definitely a move well outside of the norm.

The S&P 500 is roughly 24% higher without a 2% decline. So, the air is starting to get thin at these price levels. In addition, the rally, without a 2% pullback, has lasted for 88 days. This puts the current bullish streak in the top 25 all-time and top 3 in terms of returns since 1928. The largest move without a 2% decline came in 1994, when the S&P rallied 26.3%.

It can’t be argued that we are witnessing something well outside of normal distribution.

We finally locked in a profit last week in our QQQ bear call spread … and it looked like a similar fate was not far off for our SPY iron condor. That is until NVDA reported earnings and the market rocketed higher shortly after the announcement. The push higher in the S&P 500 led to SPY piercing our short call strike of 505. The spread is now worth $2.87. Given the near-term overbought readings and numerous short-term bearish indicators flashing red, I will continue to hold the position, but plan to exit if our spread hits $3.16.

I’ll be adding several more positions to the mix this week. Stay tuned!

Nvidia (NVDA) is due to announce this week and has the chance to significantly move the market over the short-term. We have two positions that are both bearish-leaning at the moment, so a short-term move to the downside would be welcome. However, if that doesn’t occur, no worries, as long as we the market doesn’t rally significantly higher. If it does, we will need to adjust or close out our SPY iron condor. Shortly after the NVDA announcement I intend to add several new positions to the mix.

Volatility continues to remain low as a result of the seemingly never-ending market rally. While all of our bullish positions in our other Cabot Options Institute services (Fundamentals, Income Trader, Earnings Trader) continue to thrive in this environment, anything with a bearish-leaning or hedge-based trade has struggled. But as I’ve stated numerous times in the past, that’s why we always want to diversify our strategies when approaching the market.

The plan remains simple. I continue to focus on balancing out the overall deltas of our current positions by adding a trade, most likely a bull put spread. I’ll be concentrating on sector ETFs and individual stocks as the major indices continue to see low levels of volatility.

Not much to say this week. The plan remains simple. I continue to focus on balancing out the overall deltas of our current positions by adding a trade, most likely a bull put spread. I’ll be concentrating on sector ETFs and individual stocks as the major indices continue to see low levels of volatility.

As always, if you have any questions, please do not hesitate to email me at andy@cabotwealth.com.

We added a bear call last week and hope to add at least one more trade, if not more, this week. My plan is to balance out the overall deltas of our current positions by adding a trade, most likely a bull put spread. I’ll be focusing on sector ETFs and individual stocks as the major indices continue to see low levels of volatility.

We added an iron condor last week and hope to add a few more trades this week, including a bear call spread and a bull put spread. I’ll be focusing on sector ETFs and individual stocks as the major indices continue to see low levels of volatility.

We’ve seen an incredible rally since October 27, 2023. SPY was trading for roughly 411 at the time and at the close of the January 19, 2024, expiration cycle the market-leading ETF was trading for 482.43.

We are completely flat at the moment.

Volatility continues to float between a fairly tight range of 12 to 14 which makes it challenging to sell premium, at least in the major indices. If we see a push to 15 or higher, I’ll most likely add a premium selling play in SPY. Until then, my focus is sector ETFs and individual stocks. I’m leaning more towards the former at the moment with earnings season upon us. But I’m definitely looking to sell premium shortly after a few key announcements in some of the big blue-chip stocks over the next few weeks in Microsoft (MFST), Visa (V) and a few others.

Our SPY bear call spread is due to expire in 10 days. The probabilities on the trade stand at roughly 74% with two weeks left until expiration. A push lower early this week and we should be able to lock in a nice return on the trade.

I also plan on adding an iron condor to the mix this week and potentially a bull put spread in one of the stocks we follow on our watch list. Some stocks, unlike most indexes, have seen a return of volatility, as reflected by their higher IV ranks, so there is a good chance we will pounce on one of those opportunities this week.

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Cabot Options Institute Quant Trader is focused exclusively on creating consistent returns using high-probability options strategies including bear call spreads, bull put spreads, iron condors and more. Whether you have questions about the strategies, or even about setting up your account, or how to make your own trades, Andy will answer all of your questions

Today we are going to close our two Bear Call Spreads (QQQ and SPY) in the Quant Trader portfolio. Here are the details:

I’m adding another new bear call spread to the mix and intend on adding several more trades over the coming days.

I’m going to hold on to my March SPY iron condor and will close towards the end of the trading session tomorrow or Friday depending on the price action over the next two days. When I do close, I only plan on closing the bear call side and will allow the bull put side to expire worthless.

I’m going to take some profits off the table today ahead of the NVDA announcement. For those that wish to hold for further profits, please be aware of the risks.

I want to add some downside exposure; so, with QQQ trading for 422.16, I want to place a short-term bear call spread going out 38 days and outside of the expected range to the upside, or 440. My intent is to take off the trade well before the March 1, 2024, expiration date.

Volatility popped a bit today and even though I would like it to be slightly higher, I’m going with a high-probability iron condor to bring in a bit of income. Hopefully, we continue to see volatility, as seen through the VIX, push above 15. If so, more trading opportunities should present themselves.

With just over one week left until expiration, and some potential short-term market-moving info ahead of us (CPI, earnings) I’m going to go ahead and do the prudent thing by taking our SPY bear call spread off the table.

We’ve held on as long as we could, but we’ve hit our stop loss, so it’s time to close our SPY December 15, 2023, 456/461 trade. Earlier in the week, SPY dropped down to roughly 454, so we thought we were on the dancefloor. Unfortunately, the 454 area acted as a strong area of support throughout the week so we never saw any true decline that would have helped the position.

After SPY’s historic, 8.9% rally in November (which resulted in a few subsequent losses), I want to sell a bear call spread in SPY going out to the January 19, 2024, expiration cycle. We continue to stick with the probabilities knowing that losing trades will come from time to time. We don’t play on the fringes of the bell curve. Anomalies will occur, and when they do, oftentimes when selling premium using a high-probability approach, losses follow. That’s understood. And that’s why we diversify the strategies (a.k.a. poor man’s covered calls) we employ. But when considering November saw the second-best November since 1980, behind only the pandemic-driven rebound in 2020, remaining disciplined to invest within “the curve” by using a high-probability approach is key.

Our stop loss has been hit, so we need to stay disciplined and exit the trade. We’ve seen back-to-back losses for the first time since early February of this year and, believe me, more losses will come. But, as we all know, by staying disciplined and continuing to stick with our high-probability approach we will be successful over the long haul and that’s what truly matters. Remember, we need to allow the law of large numbers to work in our favor, and taking stop losses, when the time calls, keeps us moving in the right direction.

I want to sell a bear call spread in SPY going out to the December 15, 2023, expiration cycle. As mentioned in our alert Friday and issue today, I want to take advantage of the current short-term oversold readings and two unclosed upside gaps from last week.

Well, we’ve seen five straight days of positive gains to the tune of 6%. While this may have helped all of our delta-positive poor man’s covered call positions in the Fundamentals service, the push higher wasn’t as kind to negative delta positions.