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

• Stocks pull back as AI-driven tech names face valuation pressure and Bitcoin dips below $100K, snapping the market’s recent rally.

• The Big Short’s Michael Burry is back with new put positions against Palantir and Nvidia, echoing his signature bearish tone.

• Warren Buffett hits “sell” on $41 billion worth of Oracle, hinting that even the Oracle of Omaha sees overvaluation creeping in.

• IBM joins the layoff party, cutting jobs in its fourth quarter amid a company-wide efficiency push.

• Tuesday: Election season is back.

• Former VP Dick Cheney dies at 84.

• U.S. manufacturing contracts for the eighth straight month, marking one of the longest factory slumps in recent memory.

• Options traders turn cautious, as new data shows optimism peaking among the “Magnificent 7” names.

“Good-To-Know’s”

Selling options, even more so than buying, rewards repetition and consistency. The market doesn’t care that you “felt good about this one” and decided to up the risk. It only responds to math, margins, and mindset.

Check your process. Are you trading your plan, or drifting from it?

The difference between a professional and a hopeful amateur isn’t knowledge—it’s consistency, especially when things get boring.

Quote(s) I Like

Thought Throttle

Most traders think delta is only about direction.

It’s not. It’s about exposure.

Delta tells you how much your option’s premium changes when the stock moves $1.

A call with a delta of 0.50?

For every $1 the stock rises, your option’s premium gains roughly $0.50.

This is the technical definition of delta, but it is not the full story.

Because delta doesn’t just measure movement. It measures involvement.

The higher the delta, the closer you are to owning stock.
The lower it is, you guessed it, the further you are from ownership.

Owning stock is equivalent to a delta of +1; shorting is –1. A 0.70 delta call behaves like partial ownership. A 0.10 delta put barely stirs.

And here’s where most traders stop. But delta has another layer, beneficial to sellers specifically—probability.

Roughly speaking, delta tells you the chance your option finishes in the money.
A 30-delta put? About a 30% shot at being touched by expiration.
A 10-delta? Just 1 in 10.

Delta isn’t just the measure of movement, but a map of likelihood.

When you sell options, delta becomes your steering wheel. You don’t control where the market goes, but you can control how tightly you grip.

Simple enough?

What Do These Look Like Between Different Strike Prices?

Let’s Look at Tesla (TSLA) to Compare:

Tesla’s trading at $444.26. Let’s look at three puts we could sell.

Same expiration of December 19th, 2025 (45 Days Out), different deltas:

At 30 delta ($415 strike), you’re getting about $2,055 in premium for every contract. That’s a 5.21% return on collateral, or roughly 51% annualized. It’s the most aggressive of the three. It has the tightest bid–ask spread (0.97%), higher daily decay ($34.78 per day), though lower theta relative to its premium (–1.69%). You’re closer to the money, so the premium’s rich, but the risk is real.

Slide down to the 20 delta ($385 strike). The premium drops to about $1,130, trimming your yield to 3.02% or approximately 27% annualized. Liquidity starts to fade here, as spreads widen to 2.6%, though still relatively liquid. Theta is decaying at about $28 per day, which is about 2.48% of its premium per day. It’s a middle ground, with a moderate cushion and moderate return.

Then there’s the 10 delta ($350 strike)—the safe zone. You’re pocketing just $550, a 1.6% total return or roughly 13.7% annualized. But you pay for comfort not only in smaller returns. The bid-ask spread increases to 3.6% (still manageable), and while theta is the lightest here at $19.58 per day, it’s actually burning 3.56% of its smaller premium each day. You earn a smaller, less risky return, though it decays faster proportionally.

The Takeaway?

High delta pays more, but demands more. Low delta pays less, but lets you breathe.

Every trader and investor wants the perfect blend of return and safety. But the truth? There isn’t one.

There’s only the delta that matches your temperament. Find the trade-off that matches your goals best.

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.

Throttle Q&A

How is delta affected when there are multiple legs in an options strategy?

When you build a multi-leg option strategy, each leg carries its own delta—its own sensitivity to price movement. But when you combine legs, those deltas add up to create a net delta for the overall position. One side might lean bullish, another bearish, and together they form the directional bias.

For example, say you sell a $100 strike put and buy a $95 strike put beneath it. The short put might have a delta of +0.35, with the long put’s at –0.15. Combine them, and your net delta is +0.20. Still bullish, but less so.

How Does Delta Change?

Without getting too complex, delta isn’t static. It moves as the stock moves. When the underlying price rises, call deltas increase (they become more positive), while put deltas decrease (they become less negative). When the price falls, the opposite happens.

This rate of change in delta is called gamma. It measures how quickly delta reacts to movement in the stock. High gamma means delta changes fast (common in short-dated, at-the-money options). Low gamma means delta shifts slowly (as in longer-dated or deep in/out-of-the-money options).

Without getting too deep in this edition, delta is alive. It moves with the market, and gamma dictates how fast it changes.

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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.