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

• Wall Street is mixed ahead of the Fed decision

• Speaking of, the Fed meets today, and there is a very high chance of a 0.25% cut

• How much has the U.S. GDP grown in 2025? This official thinks 3%

• China’s trade surplus hits record $1 trillion

• Could AI level the financial-planning playing field?

• NY Fed says prices are stable; Your wallet may disagree

• From Wild West to Wall Street, Crypto Gets Approved for U.S. Derivatives Backing

“Good-To-Know’s”

Traders fall for the same illusion. A stock that has fallen five straight sessions isn’t suddenly “due” for a reversal.

“It can’t go lower.”

Yes, it can.

An important clarification: A streak isn’t the same as mean reversion. Mean reversion only matters when the forces driving the move begin to weaken.

If momentum is still strong, volume is still heavy, and volatility is still expanding, nothing is “due” to reverse. You may just be falling for the Gambler’s Fallacy.

Reversion requires evidence. Streaks require nothing.

Quote(s) I Like

Thought Throttle

There are so many mistakes that can be made when selling options. Of all of them, the most obvious, yet the one that somehow needs restating the most, is this:

Don’t sell an option if assignment would ruin you.

For cash-secured puts, don’t sell options on stocks you would never want to own.

For covered calls, don’t sell options on stocks you would never want to sell.

Assignment isn’t a glitch in the system. It’s an integrated part of the process. And if you get enough reps in selling options, it becomes inevitable.

You’d think more traders and investors would deeply consider the underlying asset on which they’re selling options—especially since options are derivatives—but this isn’t always the case.

Many traders downplay assignment and treat it like it’s no big deal. For CSPs, this usually sounds like:

“Who cares if I’m assigned? The stock will eventually go back up.”

Untrue.

Plenty of companies never go back up. Bankruptcies are real. I know recent stock market history has made companies feel invincible, but they can and do fail.

And even if the stock does recover, what if it takes ten years? A whole decade just to break even. During that time, your capital is tied up, earning nothing while other opportunities pass you by.

You’re forced to choose: Wait it out and hope for a return, or sell for a loss and move your capital somewhere else with a future.

If the idea of owning 100 shares makes you nervous, you shouldn’t be selling the contract in the first place.

When this reality sets in, it usually plants seeds of fear. Fear leads to rolling at bad prices, doubling down on weak companies, or closing positions in frustration.

Professionals flip the script.

They treat assignment as inventory, not failure.

They only sell puts on companies they’re happy owning through volatility, drawdowns, sideways markets, etc.

When assignment happens, they’re not scrambling. They’re smiling. They’re acquiring shares at a discount, lowering cost basis, and potentially setting up the next covered call.

And yes, the same logic applies in reverse with covered calls. If you aren’t okay with selling the shares… then you shouldn’t be selling covered calls either.

If you want to sell options the right way, your first filter shouldn’t be delta, IV rank, or premium.

It should be one question:

“Would I be happy with the very real outcome of assignment at this strike price?”

If the answer isn’t a confident yes, walk away. Bad stocks don’t magically turn into good ones just because the premium is juicy.

Make assignment easy on yourself:

• Sell puts on businesses you understand.

• Size positions small enough that assignment doesn’t overly disrupt your account.

• Exit only when the fundamentals break, not when your emotions do.

Assignment isn’t the enemy. Misalignment is.

When the stock, the strike, and your conviction all line up, assignment is just another way your strategy pays you for being prepared.

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.

Trade Mechanics

In this example, we’re comparing two cash-secured put opportunities: one in a high-volatility growth stock (HIMS) and one in a lower-volatility, dividend-heavy telecom giant (VZ).

Each strike selected is the ~23–25 delta option expiring January 16th, 2026, just 38 days away.

HIMS comes out on top in terms of potential return, offering 4.95% in just 38 days. This is roughly a 59.0% annualized rate if everything goes smoothly (unlikely over the long term).

This is what elevated volatility gives you. Meaningful returns and a meaningful discount if you’re assigned.

The HIMS put offers a potential entry nearly 16% below the current price, making assignment far less scary if you want to own the underlying business.

VZ, on the other hand, is your classic low-drama blue-chip.

It’s a 1.06% return for the same timeframe, which is about 10.7% annualized.

This reflects VZ’s steadier price behavior and massive market cap. The discount is smaller, the risk is lower, and the premium behaves accordingly.

Both trades require similar cash outlay, but the risk profile, temperament required, and potential volatility shocks differ drastically.

Keep in Mind…

Premiums can inflate around catalysts, and all return figures assume a clean expiration with no early assignment, liquidity slippage, or spreads widening.

Be prepared to own 100 shares if assigned. That’s the whole point of cash-secured puts.

If you wouldn’t own the stock at your strike, you shouldn’t sell the option (Sound familiar?).

Less liquid tickers may have wider bid-ask spreads, and tax considerations vary by account type, with most stock options being treated as short-term gains.

Market conditions shift quickly, so size appropriately and always have a plan for assignment.

Basically, there is nuance. Know the ins and outs of your position well. Best of luck.

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

What Is Quad Witching and Why Does It Move the Market?

Quad witching is the day each quarter when stock index futures, stock index options, single-stock options, and stock futures all expire together. This creates heavy repositioning by institutions.

For option sellers, quad witching matters because it often causes sharp, temporary swings in price and volatility. Premium can inflate or collapse quickly as hedges unwind.

It’s usually not directional—just noisy. Use caution trading during these weeks.

The next one takes place in 9 days (Friday, Dec. 19th).

“I Have a Small Account; How Can I Get Started?”

1. Build capital patiently. Give yourself enough cushion to sell options responsibly and strategically. Building big things takes time.

2. Focus on consistency. Stack small wins instead of chasing big paydays. Remember that it is a marathon, not a sprint. Let time and compounding do their thing.

3. Keep learning. The more you understand the mechanics, the more disciplined you’ll become in your efforts.

Got any questions or comments? Feel free to reply to this email—we’d love to hear from you!

If you found this helpful, feel free to share or forward this email to anyone who might be interested! We appreciate your support.

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.