Weekly Income Alert – November 14, 2025

Welcome to Weekly Income Alert. I’m Marc Lichtenfeld. So I’ll forego the pleasantries since today is not a particularly pleasant morning as the Russell is down significantly where our spread that expires today is in the money. So basically, unless the Russell bounces pretty sharply, we’re going to sustain the maximum loss, which we’ve avoided for six months now.

We have still assuming we take a loss today, we will have won twenty two out of twenty four weeks. So, you know, still pretty darn good. But that doesn’t make it any easier when today’s loss is going to be pretty significant. So let me kind of tell you the mechanics and also why it happened the way it happened. So the mechanics today, assuming that the Russell closes below twenty four forty, which is the bottom part of our spread, a thousand dollars per spread will come out of your account. So if you’ve had one spread, a thousand dollars. If you have five spread, five thousand.

So that’s the way it would work. You don’t have to do anything. You don’t have to close out anything. It will automatically both options will be assigned and exercised and the money will just come out of your account.

Remember, you collected the credit. I think our official entry price was two twenty. So the maximum loss would be seven eighty dollars per spread. So that’s how that will work.

Again, you don’t have to do anything to close it out. It will happen automatically if it’s below twenty four point four zero.

Actually, it’s below twenty four point five zero, so if somehow it bounces between twenty four point four zero and twenty four point five zero, the twenty four point four zero put that you bought would be worthless. So you don’t have to do anything there. The twenty five point five zero put that you sold would be assigned And, you know, the difference between the two strikes is what the price that you’d be assigned would be. So, that would be a smaller loss. If it’s above twenty five point five zero, then it expires worthless. So, that’s going to require about a three percent jump from where we are today.

So I did see in the chat, you know, hey, why didn’t we get out earlier? Here was my thinking yesterday. So first of all, understand that typically, and especially in bull markets, stocks tend to take the stairs up and the elevator down. So it means that they tend to kind of chug higher, but then when there’s a drop, it can be pretty nasty. So yesterday, you know, we opened right at about twenty five point five twenty five point five zero twenty four dollars where are we? Twenty four point five zero dollars sorry.

We started going a little bit lower and I wanted to see if we’d get any kind of a bounce.

I did not expect the market to drop so quickly so hard. It was really a whoosh lower. Once it fell hard, then I said, okay, let me see if we get some kind of a bounce because at this point we were already in the money. So, let’s see if we get some kind of a bounce.

We didn’t. It just kept going lower all day long. And that’s why we are in the situation that we’re in. So, basically, I wanted to see if there was any way to salvage this trade.

See, you know, we did have time on our side, meaning that we still had a day left or two days left. This is yesterday morning. So, we had a little bit of time to get some kind of a bounce. Even if we fell a little bit yesterday, there was the opportunity for a bounce today.

But the market just didn’t cooperate. Had that strong, strong move lower pretty darn quickly and we just got caught. So that is what happened. And I’m certainly upset about it too. But again, it’s the first time in six months. And I got an email today asking, well, how do we recoup these losses?

Well, the answer is you kind of don’t. There’s not like a magic bullet. We just keep doing what we’ve been doing, which is every week generating some income. And we know that there are going to be losses.

And remember, when we did our backtest, that eighty six percent win rate and I think our average return, I want to say, was twelve percent, that included the losses and every loss in the backtest was a maximum loss. That’s not going to be the case here in real life. Today it was, but it’s not going be the case in real life. But that was with a maximum loss every single time we took a loss in the backtest.

So, the system works. We are just in a period where the market’s a little bit weak. It’s been weak for about two, two and a half weeks now.

I don’t see anything to tell me that this bull market is over. Actually, sentiment is pretty bad right now. The AAII investor sentiment indicator, it’s close to fifty percent bearish, which is pretty ridiculous when we’re about five percent or six percent from all time highs. That’s nuts. That’s way too bearish. That is not a sign that things are turning lower. In fact, it’s probably a sign that things are going to bounce fairly soon.

And so, we’ll see, you know, what happens. Of course, the natural question is, you know, do we start selling call spreads, bearish call spreads? And as I’ve said, I need to see evidence of a real downtrend. And a simple five, six percent correction over a few weeks is not that downtrend at all.

And as I’ve said before, I’m not going to be the one to call the top.

Calling the top is impossible. And anybody who tells you they can do it from week to week and tell you the direction of the market from week to week is either lying to you or to themselves. So, I trade trends. And right now, we are in a big bull market.

And until I see evidence that we are no longer in a bull market, we’re going to continue to stick to our discipline and basically trade the way that the system has shown us we should be trading because we tested the system in all kinds of markets and it worked really, really well even during the periods where there were setbacks. Over the long term, it worked. And so, what I mentioned to the person who wrote to me saying, how do we recoup the losses? You do this, you know, you stick to the work week after week, collect those two hundred three hundred dollars whatever it’s going to be each week.

And then over the long term, that’s going to make some money. And there’s a really good analogy. Last night I was playing poker online in a tournament.

And I’ve mentioned this before, I play poker the way I trade. I’m just trying to accumulate chips, right? And so I’m being very disciplined. I’m not playing bad hands.

I’m folding when I need to fold, and I’m just accumulating chips over time so that when I get unlucky or I misplay a hand I’m certainly not a perfect poker player So when that happens and I lose a big pot, it certainly stings. I don’t like it. But I’ve accumulated enough chips over time that it doesn’t knock me out of the game. I’m still ahead.

And so that’s exactly what happened last time when I was playing poker. I totally misplayed a hand, But I had accumulated plenty of chips, and so I still had enough chips to keep going and continue on in the tournament. And that’s basically exactly what we’re doing here. We’ve won twenty two weeks out of twenty four.

We’ve accumulated a lot of wins. If you’re brand new, you you’ll have a little more catching up to do. But I’m very confident that over time we’re going to continue to generate income, you know, each week or most of the weeks, and it’s going to pile up enough cash to offset when we have a losing week, even when it’s a big loser like we had this week. So, there’s still a little bit of time.

We could get a rip higher in the market. It kind of feels like we could get a bounce whether it’s going to be enough of a bounce. I don’t know.

As far as our other positions.

So we have, we’ve got the next week, the November twenty first, twenty three point eight zero, twenty three point nine zero. So right now we’re in the money there. So that’s not great. Again, we don’t want to be in the money.

We want to be out of the money because we’ve sold these options. So, that’s not great. Not a max loss yet because we still have a week to go. So, there’s still plenty of time for a bounce.

We don’t need that large of a bounce really for that one to be good. And then we’ve got the November twenty eighth, twenty three tens, twenty three twenty put.

And that one is fine right now. We still have two weeks to go. So, you know, we’ll see what happens. Hopefully, the market doesn’t continue to go lower.

But right now, there’s nothing to do with either of those positions. Obviously, next week’s position, I’ll be continuing to monitor that. And if I feel like we need to get out early, I will let you know. But again, there’s nothing that we need to do for this week.

If we do get a bounce and I feel like we need to get out, then I’ll let you know. But I assume that this is going to expire in the money and everything will just be assigned. And again, you don’t have to do anything. So, let’s get to this week’s trade.

So I’m going to share my screen.

Just give me one second.

Okay, so like always, we’re trading the Russell, so it’s dollar sign R U T on Schwab.

And then we need to change the strategy to a vertical put spread.

So remember, we need to change, again, this is on Schwab, might be different on other brokers, we need to change it to RUTW in this dropdown in order to get some of the other expiration dates. And so, we are trading the December fifth.

And let me see where the Russell is right now. We’re at twenty three point seven two, so let me see what that’s going to come out to.

So right at two thousand three hundred and I know that the two thousand three hundred’s have plenty of volume.

Actually, not as much as I would have thought, but that is a good strike price to trade, so we’re going to trade the 2300s and we’re going to buy the 22.90s. So we’re selling to open the December fifth, two thousand three hundred put and buying to open the two thousand two ninety. You can see the midpoint of the credit spreads two fifty, two fifty five, two sixty, a little bit higher than we’ve been getting lately because understandably volatility has increased. So that’s positive. That’ll give us a little extra juice.

So right now we’re at two sixty. I’m going to put my limit price in at two fifty five to try to make sure I get that amount.

So review the order, and I’m going to go ahead and send that out. So you can go ahead and place that trade right now. Let me send it out to everyone.

And you can let me know if you’re getting filled at two fifty five.

Made a mistake in the form. Let me fix that.

Alright. So I have sent that trade out. Let’s see. You guys getting filled two fifty five, two fifty, two fifty five.

Alright. I’m gonna go ahead and place my trade.

Alright. And, yeah, I just got filled at two fifty five, so we are good to go there.

So that one is done. So yeah, nice to get a little extra juice this week.

So that’s good. And now let’s get to your questions. I’m sure you have a lot of them.

So yeah, a lot of people getting filled at two fifty five. Good stuff.

So Tom W. Says, is it ever possible or helpful on trades that tank like this to roll it out a week looking for a rise in the index over a week? So kind of depends on where it’s trading. So if it’s trading deep in the money like it is today, no, because to roll it over basically means you have to close out the trade, which you’d already would be closing for pretty much a maximum loss. I mean, maybe maybe be able to do it for, let’s say, nine ninety instead of ten, but ten being the maximum loss because that’s the difference in the strike price.

So, there’s really no point in doing that. I think the only time you might consider doing that is if you’re taking a partial loss, but then you’re kind of doubling down on the following week because we already have had a position in place. So, for example, if let’s say yesterday morning you did that and took a partial loss, but now you’re going to have two trades expiring November twenty first and you really better be right in a short period of time in that one week in order to recoup the losses. So, way the backtest worked was that the three week window was the most successful. So, I’m not really in favor of that strategy of trying to roll over a trade that’s losing. And again, if deep in the money, there’s no point to it because the loss is already a maximum loss.

So Toby S. Says on Schwab, I only see the monthly, not the weekly. So if you go to that drop down menu where it said RUT, click on that and then you should see RUTW. And then if you click on RUTW, that will give you all the different expirations.

Let’s see.

So Joe has a great question. I realize you’re not using technical indicators or evaluating current trades or market direction, but what criteria will you be looking at to determine the market shift or directional change for the Russell? That’s a really, really good question. So I am using technicals, not so much the indicators. I’m not looking for, you know, RSI to roll over. I’m really looking at the charts as far as is there a trend? Has the uptrend of the bull market been broken?

Has important levels of support been broken? You know, things like that. So, you know, is the picture really changing? And I think one of the things you can one of the generalities I think you can say about technical analysis and really the way that I try to approach it, especially when I’m talking about trends, is you could show a chart that’s trending to a kid in seventh grade and say, what direction is this moving?

And they can tell you. And so that’s basically what I’m looking for. I’m looking for a clear trend. If I don’t have that clear trend, then we’re absolutely sticking with the system because we back tested the system and it’s worked.

If that trend is clear to me and to somebody who’s not necessarily a chartist, just somebody who could look at a chart and explain the direction that this is going, that would be probably the moment that I change it. So I’m telling you right off the bat, you know, we’ll be late because I’m not trying to pick the tops. I’m not trying to guess from week to week which direction the market’s going. So that’s, you know, that’s going to happen. But again, going through the backtest, seeing the results that have worked over time, periods where the market shifted over the long run, the system worked really well. So, that’s what we’re going to do. In the meantime, we have collected all these weeks of income that are going to offset weeks like we have today.

All right.

Andy G, do we need to physically close these out today? My fear is my short position will trigger, but not my long. I’m using Fidelity. No, your long position will trigger as well as long as it’s in the money.

Index options are automatically assigned, exercised at expiration. So, that will happen automatically. You don’t need to do anything. It makes you feel a little more comfortable.

You you want to you may want to just double check with Fidelity, but that should be the case. Index options are automatically signed at expiration because remember, there’s no stock to exercise. Like if you were doing it with an ETF or a stock where you’d physically be taking possession of a stock or selling a stock, that’s not the case here. It’s cash until it happens automatically.

L. A. K. Says December fourth p. M. On Fidelity or December fifth on Fidelity? December fifth is the Friday, so that’s the date that we are doing.

Saucy Jim one says, I’m with Fidelity. They will auto assign. Thank you very much for adding that. Yeah, that should be the case with every broker.

But Saucy Jam ran for the exit yesterday. All right. Well, good job, Saucy Jam. Glad you’re able to do that.

Let’s see.

What other questions do you have?

Scrolling up here.

Can you explain the max loss on a ten point spread? Yes, absolutely. So when we are trading a ten point spread, the maximum loss would be one thousand dollars per spread minus the net credit. And it’s one thousand dollars because remember, options are traded in one hundred unit increments. If you were trading stock options, there would be one hundred shares.

With an index, it’s one hundred units, I guess you could say, because you physically take possession of an index. So it’s just one hundred units. And so it’s one hundred times each point is what that point is worth. So a ten point spread means there’s going to be one thousand dollars on the line.

So like we have today with a max loss situation, dollars one thousand comes out of your account. You already collected two twenty.

That was our official entry price. So it’s one thousand dollars coming out today, but you already had two twenty in the account. So the max loss would be seven eighty. So that’s how that works. If we collected four hundred dollars let’s say, then the max loss would be six hundred dollars because it’s going be one thousand dollars minus whatever your net credit was.

All right, so this is a long one by Mike.

Given that at times you got us out early and that we didn’t get out the single time we should have, which was this time, Shouldn’t we set a rule when to get out if that also that neither you or us are clouded by our judgment or emotions? I imagine the back testing didn’t involve getting out early. We need the gains to compensate for the losses that we know will happen, not getting out on time.

We shouldn’t have made up for today’s loss. So good question there. So correct. In the back test, we did not get out early. Those are all maximum gains or maximum losses unless expiration unless it expired in between the spread, then it was, you know, whatever that was. But yeah, for the most part, it was a max gain or max loss.

So it’s really tough to have hard and fast rules when it comes to options because they are so volatile. Now, I’ve seen things online where YouTubers are saying if you’re selling spreads or selling naked puts to always get out at, you know, a fifty percent gain or an eighty percent gain, whatever their number is. I don’t agree with that because, yes, we do want to try to have the maximum gain when possible.

I think fifty percent is way too short to have that as a rule. But also, when I’m trading, I’m trading based on the underlying security. So, you know, if it’s a stock or an index and I need to make a decision, I’m thinking, did that stock or did that index break support?

Basically, what’s the chart telling me? How’s the price action in that security versus the option. Because again, the options can be so volatile and especially options that have a decent spread. And I’m not talking about the spread between the two strikes. I’m talking about the spread between the bid and the ask.

And so, you know, if you have, for example, the 2300s that we sold today, now as I’m looking at it, the bid is twenty nine point five zero dollars the ask. So twenty nine point eight zero thirty point five zero So that’s a seventy point spread right there between the bid and the ask. And so figure that the midpoint there is about thirty point two zero, let’s say, but somebody hits the ask and hits it at thirty point five zero or thirty point seven zero. And that as a result triggers your specific rule to get out when an option is up or down a certain amount, you know, that can really mess you up, especially when options are trading with decent sized spreads. If you have an extremely liquid option that trades with just penny spreads, that’s going to be a little bit different, but that’s generally not the case here with the Russell. So I don’t like to have hard and fast rules for options. I’m always looking at the underlying security.

And so I guess that begs the question then, should we have a rule with the underlying security?

But again, so if we said, okay, well, if we exited every time it came, let’s say, right to our top strike price, right to where we sold, well, at what point? If it’s two weeks before, we’ve got a lot of time for that to be made up.

If it’s the day before, then we have less time. So, think you would need so many different rules for so many different scenarios.

So, if you want to set your own rule for that, you know, you’re welcome to. Whatever’s going to help you sleep at night. But I would caution you not to do it based on option price, but more on the underlying security because options can just get too volatile, the spreads are too wide, and you could end up pulling the trigger way too early and when it’s not necessary. So, that’s kind of a long winded answer to that question.

I’m not sure if I totally answered the question, but that’s my thinking on kind of rules with options. One of the reasons we don’t use stops on options at the Oxford Club at all. Alexander Green doesn’t. I don’t do it.

It’s always based on the stock itself. So, that’s our thinking on options and rules.

So SM Trader agrees with me. Okay, thank you.

So I was going to this is interesting. So Matt says, I was going to close yesterday, but at Fidelity, the pricing was like twenty one thousand dollars Should I have proceeded or better to let it play out? So, that doesn’t make sense to me because really the maximum loss can only be ten if you’re treating it correctly. Now, if you’re hitting the bid and the ask, then it could be I guess it’s possible.

But I would check with Fidelity on why that was the case. That doesn’t make sense to me. I know sometimes we get these kind of crazy quotes on these spreads, but really the maximum loss on a ten point spread should be ten points. That should be the maximum that you would pay to buy it back if you were going to.

Let’s see.

So I’m not sure I understand the question by Profit Hunter. Right now, see about an eight percent drop in the Russell, historical Russell drop before turnaround.

I don’t have an average for when the Russell historically bounces after a drop. And I don’t think that would be particularly relevant either.

Every market condition is a little bit different.

But like I said, right now, we’re still in a bull market. So, it’s not something I’m particularly worried about. Coming up with a number, whether that number would be six percent, eight percent or fifteen percent, don’t think necessarily is that important. To me, what’s important is where support and resistances are. And just to kind of eyeball it real quick, looking at my chart, We’re kind of sitting on one level of support right now at about two thousand three hundred and sixty.

There’s some more.

There’s a big level of support at about two thousand three and thirty would be the next big level of support that I would come up with.

Kathy says, Wouldn’t it be great if we had some super good news and the indexes ran all the way back into the profit level by the end of the day? That would be great. And actually, there was some news this morning that Treasury Secretary Bessen said that they’re talking about scrapping some of the tariffs in order to lower the price on food. I thought maybe that would have some effect on the market today, a positive effect.

But I think the market’s really ignoring everything that’s coming out of the White House these days just because, you know, the opinion just changes from day to day. And I think basically whatever news comes out of the White House is basically being ignored by the market. So, it would be nice if we got some good news and we got a jump in the market. And, you know, last week, things were looking kind of bleak and then the market ripped higher.

So, it’s certainly not impossible.

It could be a buy the dip day. We’ll see what happens. We did have a little bit of a bounce first thing after the market opened lower. We’ll see what happens as we go forward.

So Carlos says, whatever makes sense to roll down our position to a lower strike as the market approaches our number, it might, depending on the value of that spread at that moment, it certainly could.

Every situation would be a little bit different, but it certainly could. Like I said, today or yesterday, it didn’t make sense because we were in a max loss situation. If we had a small partial loss or even a partial gain, then we certainly could.

But again, I’m generally going to be sticking with the three weeks out rule. So, you know, if let’s say yesterday we can get out the partial loss, would it make sense to just lower our strike for today’s expiration? Probably not because the credit that you would get would be so small that it probably wouldn’t make a whole lot of sense.

Generally speaking, it comes to trading and a position that’s going against you, whether you’re taking a small loss or taking a smaller win than perhaps you had earlier, I generally don’t roll it over, try to make that trade work better for the most part. And you probably won’t be surprised by this with how much I talk about discipline and things like that. When I’m out of a trade, I’m out of the trade and I exit. And when I trade stocks and things like that, when I exit, whether it was a big winner, a big loser, anything in between, I generally forget about it.

I’m out of it. If there was a big lesson that I learned because of the trade, then it’ll stick with me. But if it’s kind of your average trade that you got a big win or or win against you, you know, I’m really one of my superpowers is kind of just putting stuff behind me and just, you know, rolling with it and moving on. And so when it comes to, let’s say, rolling over a trade and trying to salvage it, generally speaking, I’m not going to do that.

I’d rather just wait until Friday, put on the next trade for three weeks and move on.

All right.

Ramirez says, When looking for support lines, how far back do you trend?

That’s a really good question. So on the Russell for this particular trade, I’m generally not looking too far back because we’re trading three weeks at a time. So to me, seeing where support was in twenty twenty isn’t particularly relevant. So I’m basically looking at a one year chart.

When trading stocks, then I’d like to see not so much support, but I’d like to see there’s a I’d like to see how far back the trend has gone. And then the longer it has gone, the better. So, you know, with a stock, if I’m bullish and I see that the stock’s been trending higher all year, then I’ll look back and say, oh, well, it’s been trending higher for three years or no, it’s actually only been this year, just to give me a sense of how big this trend is.

But with real short term stuff, I’m generally not looking past a year because it’s not going to be that important. I guess if the support goes back even further, that will give me even more confidence that there’s that much support level and it’s that significant of an area. But generally speaking, one year will give me the picture that I need.

Let’s see.

So Edison says not filled at two fifty five dollars Should I change the trade? And if so, do you go higher or lower? So if you haven’t been filled, you would need to go lower because if you went higher, that is raising the bar even higher for getting filled. So if you if you didn’t get filled two fifty five and you raised it to sixty, now you’re saying I’m willing to take the trade if I get filled at two sixty, which is probably less likely because you haven’t been filled at two fifty five. So, if you are going to change it, you would change it lower and maybe try two fifty, two forty five. I wouldn’t go too much lower than that, but you can bring it down by a little bit.

All right, let’s get to one more.

Let’s see.

Larry Head says, How do I read my trade progress at Schwab? What do I look for?

I’m not sure exactly what you mean. I would basically if you have only an account for this particular trade, obviously just seeing the P and L.

You should be able to track the P and L based on the ticker symbol. So if you look at all the Russell trades and with Schwab, I’d have to take a look. You may have to take a look and see if RUTW is included in that. But if you looked at all the Russell trades, assuming that these are the only trades you’ve been making on the Russell, then you’d be able to tell how well it’s performing for you, the strategy. You should be able to see all your profits and losses by ticker symbol throughout the year.

All right, so that will do it for us this week. Hopefully, we’ll be back next week with better news. As always, I will let you know if I think we need to get out of anything early. Thanks for being here, everyone, and we will talk to you next week.