Weekly Income Alert – August 29, 2025

Welcome everyone to Weekly Income Alert. I’m Marc Lichtenfeld. Let’s make some money. Alright. Let’s do this.

So if you’re new here, the way this works is we, just do a little bit of housekeeping at the beginning, and then we get right into the trade and then your questions. Since we’ve been now doing this for a few weeks since most of the new people have come on, we’re gonna try to bring this in at about thirty minutes. We had been going about an hour to get to all of your questions, but, you know, the whole, the whole idea of the service once it’s up and running, and everyone’s comfortable is really, come on, do the trade, get out, really fifteen to thirty minutes, and let you guys get on with your day.

But we’ll we’ll certainly try to get to, lots and lots of questions. Thanks for everyone for being here. It’s always great. I love seeing, you know, all the notes in the chat where everyone’s from.

I see Brent Seven in Florida, Tim p eighty three in Leadsdale, Pennsylvania. We’ve got Allen p in Central Mass. Always great to see all of you guys here.

So as I said, a little bit of housekeeping. First, I’ve been getting some emails, about people who are, you know, doing really well. This week will be twelve or thirteen, unless the market absolutely crashes today. And I always kinda acknowledge that trading gods are out there and and are in control. So, but we should be twelve or thirteen today.

And so as people are getting comfortable, they’re telling me they’re increasing the number of contracts that they’re buying or or that they’re selling, and that’s great. I I do want to emphasize, though, please, please, please make sure that you are managing your risk. If you were starting off very small and are now growing into the number of contracts that you always planned on trading, that’s fantastic. I’m I’m glad it’s working out.

But make sure you’re not getting overextended. Always plan for the worst case scenario because when the market does tank, and it does from time to time. I mean, the the Nasdaq, the Russell, that can fall five percent in a day. It can fall ten percent in a week.

So, you know, there are times, and and it will happen. It it’s inevitable that it will happen at some point where we hit those those big skids in the market and we just, you know, fall off a cliff. And, you know, within a day or two, we would be in a maximum loss situation. So always trade position size according to what you can afford to lose if it all goes wrong.

Like I said, we’re we’re doing great right now, twelve for thirteen. We’re making money. I expect that to continue, but there will be those times where things get a little hairy out there, and you wanna make sure that you’re not overextending. You’re not, you know, blowing everything that you’ve worked hard for all these weeks and months.

So please make sure your position sizing accordingly.

I got an email from someone asking me about my technical take on the Russell. And funny because, I think it was just yesterday, I received a research note from a technical analyst named John Roque, who is a friend of mine and and one of the best technical analysts out there. And he was pinpointing that the Russell has been in in a basing pattern. A base is is is like a sideways pattern, and the longer the base, the stronger the move when it breaks out. And the Russell’s been in this base for about four years and is just starting to break out. The twenty three sixty was about the the top of this basing pattern. We’re about twenty three seventy eight, so just just just getting over that level.

The all time high on the Russell is, about twenty four sixty something, I believe. So if we break that all time high, that really suggests that we are off to the races. Now it won’t certainly won’t be a straight line up. We’re talking about a four year pattern, and so, it’s not just gonna be, you know, a vertical move. But if we do break that all time high, twenty four sixty six is the all time high. If we break that, then I think that we are in for an extended period of a strong market, at least in the in the Russell for sure, which will be absolutely great for, for what we’re doing here in weekly income alerts. So, you know, I’m I’m certainly bullish.

I also think implied in the question is, am I gonna make some changes to strategy based on if the Russell’s hitting resistance based on the chart? And no. So I’m I’m not I’m not looking for every little signal in a chart to decide whether we’re gonna be bullish or bearish. As as I’ve mentioned before, I need to see evidence that things have changed drastically in the market in order to be bearish because in the backtest, which included bear markets, being, being bullish, having the vertical put spreads, was what worked over the long term and generated those great returns, including the eighty six percent win rate, and that included bear market. So, I’m I’m I need to see a a real shift in the market before I do that. I’m not gonna I’m not gonna suddenly go to bull spreads just because we’re at a resistance level or just because the markets may look overbought or something like that. So that’s where I am from a a technical, a technical perspective.

Alright. So let’s get to the trade. So today’s, today’s expiration, like I said, should expire worthless.

It it’s very, very far, out of the money. It the, the strike prices are twenty one fifty, twenty one forty. We’re at where are we trading right now?

We are at twenty three seventy. So, yeah, unless the market crashes today, we are in good shape.

Looking forward, September fifth, next week’s, we’ve got twenty two tens, twenty two hundreds also looking in good shape. Also remember, we’re off for Labor Day on Monday, so there’s no trading on Monday. So we only have four trading days next week. And then September twelfth twenty two hundred, I’m sorry, twenty two sixty, twenty two fifty. And, right now that is looking good too.

So it’s it’s all looking good. Happy to report that where all all the trades are doing quite well. So let’s get to today’s trade, and I am going to share my screen.

And remember, I am trading on Schwab, so what you’re seeing on your screen may look a little bit different, as far as ticker symbols and things like that.

So on Schwab, it’s r u t or dollar sign r u t, I should say.

Alright. So, we are going to select where it says strategy. We’re gonna select vertical put. And, again, if you’re with a different broker, it might not say vertical. It might say put spread. It might say put credit or, or debit.

We want an a credit. We’re always gonna do the credit.

And here’s where it gets a little more complicated today.

And if you’re new, this will be some new information.

We’re we’re always looking at three weeks out. That’s our our time frame. Three weeks out from now, September nineteenth.

And on September nineteenth, that’s a third Friday of the month. And on the third Fridays of the month, we have a choice between what are considered the weekly options, which is generally what we have been trading, options that expire every week, or the monthly options, which expire on the third Friday of the month. Now on with index options, on the third Friday of the month, you can choose either one, the monthly or the weekly. And the difference and it’s a big difference. The difference is that the weekly options, like all the other options, expire at the end of the day.

The monthly options expire at the open on Friday. It’s a big difference, and that it’s also different than stock options. Monthly options on stock options expire at the end of the day.

It’s only index options on the third Friday if you choose what are called the monthly options or the AM options. Those expire at the open on Friday, not at the close. And so your last chance to trade it is at Thursday afternoon right at the close. So you’re you’re basically holding this position overnight. The opening price on Friday is the price that, that determines whether you’re in the money, out of the money, you know, getting, assigned, what have you. So that that is a a meaningful difference.

And each month, depending on market conditions, you know, we’ve been switching off between weeklies or monthlies. Today, I’m doing the monthlies, and the reason is that the monthlies have more liquidity in the options that I’m choosing. Generally speaking, that’s gonna be true, but, it’s definitely true today.

The weeklies often have a little bit more premium. So if you wanted to go for that, you know, that that’s perfectly fine.

When I look today, it it as I was looking this morning, it was kind of, going back and forth, which whether the weeklies had a little bit more premium. And the reason they do is because they have six more hours of trading. So it makes sense that they’ll have a tiny, tiny bit more premium. But the options I’m looking at today, there’s much more liquidity for the AM options, and that could be important, especially with the market, you know, looking a little extended, perhaps hitting into resistance like we we talked about. If we need to get out of something, it’s better to have that that higher amount of liquidity.

Getting into the positions, it’s certainly easier with more liquidity, but I’m more concerned with if we have to get out of a position. And, having that extra liquidity there will certainly be helpful. So today, we’re gonna be selling the credit spread on the monthly options or the AM options. So if you look so on Schwab, the monthly is always the default where it says RUT, and you can see it automatically defaulted to September nineteenth.

If we went to the RUTW and then looked at this, drop down menu, you can see many, many more, choices here. But we are going to just RUT the monthly options September nineteenth, and we are going to choose the twenty three hundred. We’re selling the twenty three hundreds, and we are buying the twenty two nineties. That’s a credit of two forty, a little bit better than we’ve been getting lately.

So, actually, kinda going back and forth, two forty, two fifty. I’m gonna leave my limit price at two forty, and let me review my order.

Alright. So we’ve got one vertical put spread.

Russell, September nineteenth, twenty three hundred. Russell, twenty two ninety.

Alright. That looks good. So before I place the order, I am going to send it out to everyone. Remember, it’s the AM, or the monthly options. So I’m gonna send that out to everyone right now.

I can there you see.

And let me make sure that I am clear that it’s the AM puts in the order. You can go ahead and place that order.

Limit price, two dollars forty cents.

Alright. I am submitting that.

Here we go. It is sent. So now I will place my order.

Alright. And we are good to go.

So I will stop sharing the screen.

Alright. Awesome. So, pretty decent credit this time, considering that the markets are so strong. We’ve been kind of been in the low twos.

I think last week, we’re even, we were below two. Today, we’re getting, two forty, two fifty. Seeing somebody Don got filled at two sixty. Awesome.

Filled at two forty five, two forty five, two forty nine. Great. Alan says good night from Australia. Time to go to bed.

Love to see I love to see when people are overseas and, getting up or staying up late. So I appreciate that.

Yeah. Let’s get to your questions again. This is the AM. In the future, it’s going to be the PMs because it’s it’s weekly.

But when we’re up against that third Friday of the month, we’ll it’ll it might always be different just depending on the market conditions and and the liquidity of the particular options that we’re looking at. If the liquidity was the same, if there wasn’t much more open interest on the AMs, I probably would have gone with the PMs just to get that little bit of extra credit.

And and we’re talking, you know, a few cents, maybe a dime, maybe, maybe fifteen cents. But, because there was such a a big difference at these strike prices, particularly on the one that we’re buying, the twenty two ninety, I wanted to have that extra liquidity. So that’s why, again, we did the AMs.

So, so VT says I’m searching the ticker for it in TradeStation. If anybody trades, for the monthly if anybody’s on TradeStation, if you can help VT out, again, it’s usually r u t or dollar sign r u t. Could be, dot r u t, but, if you can’t find it, you know, definitely talk to, see if you can get support at TradeStation or or do a a symbol lookup for what the Russell two thousand index is on TradeStation.

So Don nineteen eighty two two says, if there’s a price difference at expiration, what happens to that?

So the that’s a really good question. So the at expiration, it’s either gonna be worthless because it it was, it expired worthless. It was out of the money. Or if there is value, that means that it’s either the Russell is either in between the strikes or is below the strikes.

And so the the difference is so right now, you collected two hundred forty dollars, let’s say, if you got billed at two forty. That two forty is in your account. At expiration, if the Russell is below the price that you sold the the top price of if it’s below twenty three hundred or below the whole thing, below the twenty two ninety, the difference will be one thousand dollars per credit per spread, one thousand dollars minus the two forty that you took. That’s a maximum loss.

So you you you got two dollars and forty cents. If you the maximum loss would be seven hundred sixty dollars if it’s below twenty two ninety. If it’s between twenty two ninety and twenty three hundred, then whatever that price is minus the two forty is the maximum loss, but that’s whatever that price is is the amount that will come out of your account. So let’s say at expiration, the price is twenty two ninety five.

That means five hundred dollars per spread, per contract would come out of your account, in which case you would lose two hundred sixty dollars. If it’s twenty two ninety nine, only a hundred dollars would come out of the account, in which case you would, earn or you would keep, the other hundred forty dollars. So it’s always gonna be that price, the whatever the price is of the option, is gonna come out of your account, at a maximum of a thousand dollars because you have that that spread. The the the put that you bought at twenty two ninety is the insurance.

If you didn’t have that, then the losses could be tremendous. Let let’s say the market went down to twenty two hundred, that would be a hundred or ten thousand dollars coming out of your account. But because you have that twenty two ninety put there as insurance, that puts the floor on the most that you could lose, which would be a thousand dollars, again, minus the credit. So that’s how that works.

Bob h says first attempt didn’t fill. How do I redo it? So the order should be live.

Double check to make sure that your order is still active and live. If it’s not, then you can go in and, and and just, you know, resend the order. Just do it again. But I don’t know unless you have it set for there’s a a type of order called fill or kill, which means if you don’t get filled immediately, then the order gets canceled.

But so you don’t want it on fill or kill. I for weekly income alert, I always recommend that it’s day only, not good till canceled. We don’t wanna get filled on on Tuesday. Usually, it would be Monday. In this case, three day weekend Tuesday, because market conditions are gonna change. So I always have my order for weekly income alert, to be open all day in case we don’t get filled right away, and sometimes it does take a few hours. Usually, it’s just a few minutes, but sometimes it could take a few hours if the market moves away from us.

So I I I always try to make sure the order is day only, not filler kill. So that may be what happened too.

Fidelity asked for a quantity. What do I put in the quantity? So it depends how many contracts you want to, sell. So, one contract, the maximum loss will be one thousand dollars minus the net credit, which in this case is gonna be about two forty.

So you’re gonna per per contract, you’re gonna get two hundred forty dollars in income, and the maximum loss will be one thousand dollars minus two forty or seven sixty. So however much you are willing to, whatever your risk tolerance is, if you’re if you can handle, you know, losing, you know, you know, five contracts, which would be about thirty five, thirty six hundred dollars, do five. You know, it it all depends on your risk tolerance. So always select the quantity based on how much you can afford to lose.

So far, we haven’t been losing much. It’s been twelve out of thirteen, but you always wanna prepare for the worst. You know, it’s it’s easy to to have the money coming in. You wanna make sure you’re protecting yourself, when things don’t work out.

The order type does not show a net credit, only have limit credit. That’s fine. Just, you know, put your limit at, two forty and make sure, again, that it is a credit, not a debit. If it’s a debit, that means you did it wrong. You did it, in reverse.

In my Peter R says in my review, it says twenty three hundred p and twenty two ninety p. Yes. Those that means puts. You’re and just make sure you are selling the twenty three hundred and buying the twenty two ninety, which results in a credit.

Very often, it’s a very easy mistake to make to have that inversed, and, and end up with a debit, which you don’t want. If you ever do get a debit, a common question I get is, I did it wrong. What do I do? I always recommend for any trade, any mistake that you make, just get out, and and put in the the correct trade.

You don’t wanna be sitting with a trade that you never intended to to get into. Even even if it starts moving in your direction and you happen to just get lucky, you know, get out with, whatever that small gain is. And if it’s a small loss, then get out with the small loss. But you don’t wanna be holding a trade that you never intended to get into.

Terry q says, is there any reason to have a spread of five points? Would that reduce the risk and the gain, I guess? Absolutely.

You have it exactly right, Terry. So your loss would be smaller, but so would your credit. So if we had a a five point spread, let’s say we were selling the twenty two ninety five I’m sorry. Buying the twenty two ninety five, selling the twenty three hundred, the maximum loss would be five hundred minus the net credit, but the net credit’s gonna be smaller because that twenty two ninety five put is gonna be a little bit more expensive than the twenty two ninety put. So, for example, looking at it right now, the twenty two ninety five put is at about twenty one forty on the ask.

Twenty two ninety is at about twenty twenty, so about a dollar twenty. So if if you’re kinda looking in between, let’s say, twenty one twenty and twenty, so about a dollar twenty. So, roughly speaking, your net credit would only be about a dollar twenty. So, yeah, your the amount that you’re you’re collecting in the credit would be much smaller, but so would your potential loss.

And and the same is true when you expand to a wider spread in the strike. So if we went down to a twenty two eighty strike, then the maximum loss would be two thousand dollars because it’s twenty points, times a hundred. So two thousand dollars minus the net credit, but your net credit would be larger because a twenty two eighty put is a lot cheaper. Twenty two eighty put is trading at about seventeen fifty.

So, you’d probably be collecting somewhere around two hundred well, let me see. And the prices may have moved a little bit.

You’d be collecting a little bit more.

Oh, no. You you would be yeah.

Doing the math wrong. You’d be collecting about three hundred fifty dollars roughly instead of two hundred forty dollars, but you’d be risking now a two thousand minus three fifty. So the wider the spread, the, the more you can lose, the more you’ll make. And and, again, I always use this analogy of thinking of that put that you’re buying at the lower strike as your insurance.

So the less you insure your car, your house for, the lower the premium that you pay, but the more that you could be on the hook for if there is a loss. You know, if you have a claim and, you’ve only you you know, if your house is worth five hundred thousand dollars, you’ve only insured it for three hundred, well, then if there’s a loss, you’re on the hook for two hundred thousand dollars, but your premiums will also be lower. So it’s exactly the same concept that put that we’re buying is the insurance that keeps us out of big trouble if there’s a loss. But, you know, that that does impact how much we collect as a result.

Alright. Let’s get to a few more questions.

So Peter R, I’m not sure I understand this one. My credit is a dollar ninety to two ten because my limit is two forty. So if you put in the limit at two forty, that means that the minimum that you’re willing to accept is two dollars and forty cents or two hundred forty dollars for this trade. So if you put that incorrectly, you cannot get filled at a dollar ninety or two or two ten.

You cannot get filled below two forty because you’re telling the market this is the minimum that I’m willing to accept, so they won’t fill it. So that that’s why we put in these limit orders because, especially, with, credit spreads, on the Russell, you know, the the spread between the bid and the ask can be fairly wide. And so if you place a market order, you could get filled at the bid and the ask, and that the amount that you’re gonna collect will be way lower than the midpoint. So we’re we’re trying to get filled right around the midpoint.

It’s not always gonna be exact, but it should be somewhere around there, and that’s why we put in that limit price. So you you can’t get filled at a dollar ninety two ten if you put in a limit price of two forty.

Gina d says, are we doing vertical long puts or vertical short puts?

So, technically, we are selling a credit.

So, so make sure that the word credit or or or a spread is in there.

We’re selling credit spread. So make sure the word spread is in there, because every broker does have it a little bit differently. But as long as you’re selling the spread, that should be fine. And and if it says credit in there, that’s fine, but we’re not going long anything, so that’s really important. We’re we’re we’re going long that bottom put, but if you’re doing it as a spread together, we are short, a credit spread.

Marc, what is my cost? This is from RJC. If I put in the same trade, just looking to verify what I’m seeing. Cost two hundred forty dollars?

No. So the credit that you’re receiving is two hundred forty dollars. You’re getting a credit. You’re getting money today.

That money is hitting your account as soon as you hit place order. So there’s no real cost to you today. Now that being said, a thousand dollars per contract will be locked up while this trade is open.

You won’t be able to to use that thousand dollars for anything else while this trade is open, but that money is not coming out of your account. It only comes out of your account if you close out the trade for a loss or, at expiration if it’s a loss. And like I said earlier, any loss, the money will come out of the account maximum of thousand dollars.

So the the most you can lose on this trade at if you got a two forty credit is seven hundred sixty dollars. So market, goes below twenty two ninety and closes there, on September nineteenth. A thousand dollars comes out of your account. You you’ve kept the two forty. That’s already in your account, so you would lose seven sixty. But there’s no technically, there’s no cost today other than there you might have some commissions and and fees and things like that, but that’s that’s pretty small. But other than that, there’s no real cost today.

The the maximum it will cost you on a losing trade is a thousand dollars out of your account in the future. But, again, you you’ll have kept that two forty.

So Idris says, I’m on Schwab. I don’t know if I bought the AM or PM. How can I tell?

So on Schwab so on mine, it says, one dollar sign r u t vertical put spread.

If it’s if it’s weekly, I think it’ll say r u t w.

I think that’s how let me let me take a look at something real quick and see if it shows in my positions.

Sorry. Okay. So if you go to your positions in your account, and then you’ll see the the various trades. If you click on one of those, on on today’s, so you know it says, you know, RUT September nineteenth, twenty two ninety put let’s say.

Click on that and then it brings up a window that says settlement type. So let me let me show you how to do that. I’ll share my screen again. Let me just go back to it.

Okay. Let me share my screen.

Okay. So here where it’s the list of the different positions. If you click on this position, which is one of the ones that we added today, and then you’ll see right here, it says settlement type AM. That’s how we know it’s, it’s an AM. If yours says PM, then, then you did the PMs. But that’s how we, that’s how you can tell for sure.

Alright. I will stop sharing my screen.

Let’s see. What else do we have?

We’re gonna try to wrap it up pretty soon. What is a John h h says, what is a European style settlement? Great question. So this is one of the important differences between index options and stock options.

Stock options are American style options, which means they can be assigned at any time. So if Tuesday morning, you own a stock option and this the option goes in the money, that can be assigned at any time. Usually isn’t, but it can be, and it does happen from time to time.

European means it can only be assigned to expiration. So no matter what happens in the market, Tuesday, the market’s crashed and the Russell’s at two thousand, our option price would be underwater. We’d we’d have a loss on paper, but nothing can happen. They cannot assign us the the index.

Indexes are cash settled, so it’s not like you have to physically buy the index, but nothing can happen to our position.

They they they can’t take the money out of our account. They can’t exercise. Nothing can happen because it’s a European style option, which is the case with index option. So it’s one of the reasons one of the big reasons that we are using the Russell rather than an ETF like IWM, which is, you know, a proxy that a lot of people use for the Russell when they wanna buy or sell the Russell or even options on it, but that can be assigned at any time.

ETFs and stocks can be assigned at any time because there are American style options, European style options, which are the index options, can only be assigned at expiration. So that that ensures us that we can’t be assigned early. We can hold so markets crash, we can hold on for three weeks and and wait to see what happens. Maybe we get a rebound.

You know, if we don’t, then then we still take the loss, but, they can’t make us take that loss early, which is great. So, that’s one of the key reasons that we are trading the index options is because of that European style.

Alright. Let’s get to one last question.

Let’s see.

If the market tanks, would we be closing more than one week’s pair?

Great question, and it really will depend on the market and where it is compared to our positions. If our positions you know, if they’re all at at at kind of max loss situations, then there’d be really no reason to close them early.

If I’m if I’m concerned the markets are going to keep low going lower, and we have a small loss or or some of our gain has eroded, you know, every situation is gonna be different. So I I can’t tell you definitively which way I’m gonna go, on any given, you know, on in any given kind of market sell off. I’m, you know, I’m I’m reasonably sure the first time we get a sell off, I’m not I’m not bailing, but every situation is gonna be different, and it’ll depend on where the market is, where our strike prices is, where the the option prices are trading at that moment.

So, every situation is gonna be different. I don’t but I don’t anticipate necessarily just blowing out of all of our positions in the sell off. Could happen, but I don’t anticipate that happening.

Alright. So we are at ten thirty, so I’m gonna wrap it up here. If you do have questions that did not get answered, feel free to shoot me an email, mailbag at oxford club dot com. Just do me a favor.

Put weekly income alert in the subject line so they know to route it to me, and I will either answer it, or answer it in the, you know, next week right back here. Remember, I can’t give you personal advice. Can’t tell you what you should do in any given situation, but can certainly explain what we’re doing here. So thanks everyone.

Congratulations for those of you who are now twelve for thirteen. That’s pretty amazing.

So glad that this is working so well. And, Yeah. Have a great long weekend. Keep enjoying the money that we’re making, and I will see you next week.