Market Movements

^{*Weekly Return is calculated as market open of the previous Wednesday, to market close this Tuesday (yesterday); Current Level is Tuesday’s (yesterday’s) close.}

Weekly Rollout

Markets opened with a flicker of optimism before sliding back into caution as headlines stacked up. The S&P and Dow wavered while tech led losses, weighed down by renewed tariff tensions and U.S.–China port fees that rekindled trade anxiety. Goldman Sachs estimates U.S. consumers are absorbing more than half the cost of Trump’s new tariffs, tightening the link between policy and inflation. Overseas, a declared end to the Israel–Hamas conflict offered momentary calm, but experts question how long it will hold. Bank earnings provided a bright spot, while Powell’s neutral tone hinted that monetary tightening may finally be nearing its end.

Beneath the surface, markets still feel uneasy. The VIX climbed to multi-month highs as traders braced for data delays from the government shutdown, and JPMorgan warned that leveraged ETFs deepened last week’s selloff. Gold rose, yields slipped, and the week ahead is packed with Fed speakers and earnings that could set the next tone. It’s a market built on crosscurrents—where discipline and structure matter far more than calling the next move.

“Good-To-Know’s”

Its options chain is the most active in the world, routinely trading millions of contracts per day with razor-thin spreads. This makes it perfect for rolling, scaling, or managing risk with precision. Because SPY options expire every single weekday, it’s also become the playground for short-term volatility traders and institutional hedgers alike, with 0DTE flow constantly reshaping near-term implied volatility.

Even the quarterly dividends slightly tilt option pricing, with puts firming up and calls softening ahead of ex-dividend dates. Add in extended-hours liquidity and near-round-the-clock trading, and SPY stands as the most flexible vehicle for expressing a market view. From collecting premium to managing exposure, or simply riding the next leg of the bull, the variety is vast.

Quote(s) I Like

Thought Throttle

One of the most misunderstood aspects of options trading among newcomers is the belief that there is just one way to be bullish—buying calls. This couldn’t be further from the truth.

Even more uninformed, some investors may never have even heard of buying options. They may think that the only way to be bullish is to buy shares.

Long story short, they’re both wrong. The ways to be bullish cannot reasonably be numbered. With options, there is an almost overwhelming amount of flexibility and variety.

In this edition, we’ll look at 5 different plays that have a bullish sentiment, each with its own flavor of risk, capital, and conviction. Specifically, we’ll look at these bullish positions on SPY, from conservative premium plays to leveraged synthetic exposure.

Let’s jump in.

Cash-Secured Put

One of the simplest and most reliably utilized bullish setups. Selling a cash-secured put on SPY gives you income now and potential ownership later if shares pull back.

For the basics of Cash-Secured Puts, check out this previous article

Currently, SPY is trading at $662.23. If we were to sell the Nov. 21, 2025 $645 Put, we would receive roughly $8.36 ($836) in premium. This would be a return of ~1.28%. in 38 days, which annualizes to a return of about 13%. This is the premium for agreeing to buy SPY at an effective cost basis of $653.87 if assigned.

It is essentially getting paid to wait for a dip, similar to a premium-paying limit order (there are some differences). Since the position is fully collateralized, it ties up more capital, but the trade benefits from positive theta, meaning time decay works in your favor each day you hold it.

This is such a versatile method, due to its ability to create a win-win (within reason) for traders who want bullish exposure with patience, not necessarily prediction. It is a must-know for traders and investors alike.

LEAPS

Buying a long-dated, deep-in-the-money call (a LEAP) can give a return similar to, or even higher than owning SPY on margin, all without the interest rate or margin call.

Previous edition for more

For example, ownership of a Jan. 15, 2027 $615 Call behaves similarly to owning SPY shares (about a 70 delta). That means you’re effectively exposed to roughly 70 shares of SPY for a fraction of the cost of buying them outright. As time passes—and as long as the option remains deep in the money—its delta will gradually approach 100, making it behave even more like full share ownership (we’ll leave this nuance for another edition). This particular contract costs about $9,796, whereas purchasing 70 SPY shares would cost $46,356.10. Buying 100 shares outright? $66,223.00. Yikes.

Let’s assume that SPY runs up to $715.00 in 6 months (~April 15, 2025), an increase of ~8%. According to this Options Profit Calculator, a very handy tool, our LEAP would be worth roughly $12,480. This is a return of ~27.40% on an underlying increase of 8%.

Note that this is just an estimate, not a prediction or promise. Losses will also be more potent due to the leverage.

Because LEAPs are long-term options, theta decay is slow and mild, but it will still work against you if SPY drifts sideways. As detailed, the advantage comes in the form of leverage. You commit less capital upfront while maintaining significant upside exposure if the market trends higher.

Another absolute must know. Onward.

Vertical Spread

If you want bullish exposure without heavy capital, a bull call spread is a defined-risk way to play it. You buy one call and sell another higher-strike call to reduce cost, limit decay, and define the risk.

Again, there is a previous edition

In this scenario, we would buy the Nov. 21, 2025 $655 call for $20.50 and sell the Nov. 21, 2025 $660 call for $17.00. This would leave us with a net debit (cost) of $3.50 ($350) from the premiums. Our max profit is the spread width (660 - 655 = $5) minus our debit ($3.50) = $1.50 ($150), achieved by SPY closing above $660 at expiration.

This structure uses far less capital than buying shares or long calls outright. The two options basically offset each other in terms of theta. The trade may be slightly theta-negative, but it is primarily a directional play. It’s a clean, efficient bet that SPY stays above $660 by the time the November Expiration rolls around.

No unlimited loss and no massive capital outlay.

This is usually best for traders with a short- to medium-term bullish outlook who want defined risk. It is slightly more complex since there are multiple legs. Make sure you understand the added risks that come with multiple legs (pin risk, liquidity constraints, etc.).

Nonetheless, a versatile tool for any trader’s toolkit.

The Collar

What is a collar? Basically, if we own SPY (or a LEAP), we could sell a covered call for income and buy a protective put for peace of mind. It’s how institutions “stay long but sleep at night.” It is a long position, but cautiously.

You guessed it, there is a previous edition covering this.

In this scenario, assume we hold 100 SPY shares. We could sell the Nov. 21, 2025 $670 call for $10.85 ($1085), and buy the Nov. 21, 2025 $665 put for $14.15 ($1415). This is a net cost to us of $3.30 ($330), but it caps the upside and protects against major drawdowns.

If SPY moves above $670, we will have to sell our shares at the strike ($670). If SPY moves downward past $665, the put will spring into action and offset some of the loss.

The collar shines after a rally or during uncertainty—when we want to stay bullish but safe. It does, however, require the capital to own the underlying shares or equivalent exposure.

It is widely used by investors to protect gains or hedge their long positions. Personally, I do not use this structure often, but it is certainly worth knowing. It is a great way to hedge, if you're into that kind of thing (lol).

Synthetic Long

Finally, the synthetic. This replicates share ownership using options only—buy a call and sell a put at the same strike and expiration.

You already know

In this scenario, we may buy the Dec. 19, 2025 $665 call for $19.10 ($1910) and sell the Dec. 19, 2025 $665 put for 18.20 ($1820). This is a cost of $0.90 ($90). This setup behaves almost identically to owning 100 shares of SPY but requires only a fraction of the capital.

Theta exposure is roughly neutral, as the time decay from the call and put offset each other. The key is that your profit and loss mirror owning the stock. We experience gains if SPY rises and losses if it falls.

It’s an efficient way to gain full directional exposure while keeping cash free for other trades, though it demands comfort with margin and option mechanics. There is also a time limit—share ownership is in perpetuity, but this lasts for only 2 months.

Also, note that unless we have access to naked options (most traders/investors do not), we will need to secure the put. This requires a large amount of capital to be set aside, which would counteract the drive to capital efficiency.

Less common, but could serve our portfolios well if implemented strategically.

In Summary…

With options, there’s more than one way to ride the bull—and each approach can be shaped to fit your goals, capital, and comfort level.

Some strategies pay you to wait. Others amplify your conviction. A few are designed simply to keep you calm during volatility.

The real skill lies in matching the structure to your temperament, your timeline, and your tolerance for risk.

This is for educational purposes only—not a trade recommendation. Remember to always do your own due diligence and consult a financial advisor before making investment decisions.

To All Theta Throttle Subscribers…

A lot of you have been reaching out, asking for more on stock selection tips and things to look out for. I’m considering putting together a downloadable guide that breaks down the essentials in plain English.

If that’s something you’d be interested in, let me know by replying to this email or by subscribing if you haven’t already. The more interest I see, the faster I’ll prioritize building it. And as always, sharing this newsletter with a friend who’s curious about options goes a long way in helping us grow.

And yes, this guide will be FREE.

Throttle Q&A

Why do LEAPs have higher premiums than shorter-term calls?

LEAPs cost more because they contain significantly more time value. With more time until expiration, there’s more uncertainty and more opportunity for the stock to move, which makes the option more valuable. That’s why LEAPs decay more slowly than short-term options, but also why they’re more expensive upfront. You’re essentially paying a premium for time and potential.

Is selling cash-secured puts better than simply buying stocks?

Pros of selling puts:

• Generates income from the premium.

• Allows you to potentially buy the stock at a discount if assigned.

• Can be used in sideways or slightly bullish markets.

Cons of selling puts:

• Limits upside—if the stock rallies, you only keep the premium and miss out on large gains.

• Requires maintaining cash reserves for potential assignment.

• If the stock drops significantly, you still take on downside risk.

Ultimately, it depends on your strategy. If you want steady income and are okay with owning the stock at a lower price, selling puts is a great strategy. If you prefer unlimited upside, outright stock ownership may be better.

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Disclaimer

The information provided in this newsletter is sourced from reliable channels; however, we cannot guarantee its accuracy. The opinions expressed in this newsletter are solely those of the editorial team, contributors, or third-party sources and may change without prior notice. These views do not necessarily reflect those of the firm as a whole. The content may become outdated, and there is no obligation to update it.

This newsletter is for informational purposes only and does not constitute personal investment advice. It is not intended to address your specific financial situation and should not be construed as legal, financial, tax, or accounting advice, or as a recommendation to buy, sell, or hold any securities. No recommendation is made regarding the suitability of any investment for a particular individual or group. Past performance is not indicative of future results.

Options come with inherent risks. We strongly advise you to consult with a financial advisor before making any investment decisions, including determining whether any proposed investment aligns with your personal financial needs.