Weekly Income Alert – November 21, 2025

Hi, everyone. Welcome to Weekly Income Alert. I’m Marc Lichtenfeld. We’ll forego all the pleasantries and everything this morning since yesterday was not particularly pleasant.

Get right into what happened. So first of all, let me just say today’s or today’s expiring trade has expired. Remember, this was the monthly option and we chose the AM option. So that trade did expire at the open.

So unfortunately, we did take the maximum loss there.

I’m pretty sick about that because of what happened yesterday. So here’s what went down yesterday. We had the Nvidia earnings real strong. We had Walmart earnings real strong.

We had a real strong jobs number. So all of that, it lit a fire under the market. Market popped, it ripped higher. And pretty quickly, our spread was getting close to at the money and then actually went slightly in the money, or I’m sorry, slightly out of the money when it got up over two thousand three hundred ninety to two thousand four hundred.

Once it hit two thousand three and ninety, I actually wrote up the trade, had it locked and loaded to get out. Now, even when it was trading at about two thousand four hundred, we did not have a profit on the trade yet because there was still some time left. And when I was looking at that midpoint, it was fluctuating basically between about two twenty, two fifty. So we didn’t have a profit. We weren’t even at break even, even though the Russell was a little bit above our strike price.

And I was sitting there waiting, had it locked and loaded, ready to go.

And literally, as I started to move my hand to send the trade, the market retreated a little bit. So I waited a little bit longer because so far in that first hour of trading, the market had gone up. It came back in a little bit, hit two thousand four hundred, came back in, went slightly above two thousand four hundred to about two thousand four hundred three, came back in. I expected this was just going to be another one of those slight retreats. And then we’d get back above two thousand four hundred dollars I would send the trade and maybe we’d get out the slight profit, maybe breakeven, maybe a slight loss, but it would have been a pretty good recapture of our capital.

And then it was like a trap door opened underneath the market. It just went straight down and there was never that rebound. I kept waiting for the rebound even to recapture some of it, but it never happened. The market just went straight down.

And as you know, it didn’t recover. And so we’re in the situation now where we took another max loss, which, like I said, I’m absolutely sick about it.

It was worse than had the market not even rallied at all yesterday. You know, if it had never rallied at all, would have said, all right, this is where we are and you know, it stinks, but what can you do? But the fact that it was so close and I was, you know, minutes away from placing the trade when it just went straight down and fell off a cliff was really pretty shocking to me. And I think it’s especially bearish because, like I said, you had all that positive news.

And the fact that the market couldn’t hold with that is pretty disconcerting because the Nvidia news seemed to at least, you know, very temporarily discount a lot of that concern about an AI bubble popping.

The Walmart news, even though Walmart is kind of a defensive stock in that, you know, when times get tough, people will gravitate towards Walmart, but still the consumer is spending, and they were spending at Walmart. You know, it’d be a lot worse if Walmart’s numbers were poor, But Walmart beat and raised guidance. So that was really positive, showing that the consumer still has some firepower there. And then the jobs number.

Now granted, the jobs number was old. It was from September. We’re not going to have an October number, but still better than a week number, right? So all these things really should have helped the market stay positive.

And the fact that it fell so hard so quickly and there were no buyers out there once it started falling was really concerning. So as a result, today’s trade, and not just only because of yesterday’s action, I was leaning towards this, but I am going to reverse course and put on a bear call spread today. Here’s why.

Because of what I said before, just now about yesterday’s action, but we also are seeing new highs in the market retreat. So we’re getting fewer and fewer new highs. We’re seeing a weakening breadth, meaning the number of stocks that are up versus down in any given day, that’s weakening. That’s not a good sign for the market.

We’re seeing financials and the banks start to roll over. And it’s tough for markets to perform really well when financials and banks aren’t doing well. So there’s a lot of things out there. Now, one of the things that’s giving me some caution is that there’s a lot of fear out there.

We have the AAII Sentiment Survey, which is a sentiment indicator, and I talked about this yesterday in Oxford Income Weekly. I’m sorry, Oxford Income Live. That’s getting to pretty high levels of bearishness, and so when that gets extreme, that’s usually a sign of a bottom. We’re not at all time highs on that and actually it’s retreated a little bit. Last week, we had forty nine percent of respondents were bears. This week it’s forty two percent, but still more bears than bulls and that’s not normal. So, fear is out there.

So that’s a little bit concerning if we’re taking a bear trade. But right now, I think it makes sense to be bearish for the next few weeks. The fact that this is historically a very strong period in the market and it’s not, that’s not a good sign. So are we entering a bear market?

Am I saying that? Absolutely not. But I think it makes sense to take a trade on the other side, at the very least, just to hedge our existing positions as well. So that’s what we’re going to do.

Now, I do want to caution you because the call spread is going to have a higher price than our put spreads have. Part of it is volatility, but the other part is because the market’s been going down, puts are expensive. So when we’re buying that out of the money call, that call is going to be cheaper than a similar out of the money put. So the spread is going to be, amount, the credit’s going to be higher.

And I caution you, don’t try to make up for any previous losses by loading up on this call spread. You know, like I always say, maintain appropriate amounts of risk, you know, only risk what you can afford to lose.

So, you know, don’t try to double up and recapture this week’s losses in one trade. You know, hopefully it works out and we make some of it back, but the last thing you want to do is, you know, double up, triple up, what have you, hoping that you’re going to make up for past losses because when that doesn’t work out, it compounds the losses. And, you know, I’m always approaching all trading, whether it’s for myself or for subscribers, from the position of risk management. That’s really what it’s all about. You got to make sure that you are still in the game in order to be able to capture wins in the future. If you blow out because of a bad week, you’ve loaded up and the market goes against you, then you don’t have anything left. You don’t have any dry powder to continue to trade and make profits in the future.

So what we’re thinking. Before I get to the trade right now, Marquis says if we reverse course now, should we close the existing put spreads now? I’m not closing those now. I want to give the market a chance to recover. I want to give those spreads a chance to decay a little bit. Like I said, this is kind of a bit of a hedge too, so that if the market does go down and those other open trades go against us, then this call spread will, you know, will make up for some of that. So with that said, let me go ahead and get this trade going.

Let me share my screen.

Alright, you should be able to see that now. So, again, we’re doing the Russell.

We’re going to trade options. Now remember, we’re trading a vertical call spread, not the usual vertical put spread. If your broker doesn’t say vertical, it should say bear call or maybe just call.

Now, let me just double check where we are on the Russell and do a little quick math. I think it’s going to be about the same when I looked.

Yes, okay. So, we are going to now remember, because this is a bear call spread, the sell is the lower strike. When we’re doing the put spreads, the sell is the higher strike, but on a call spread, the sell is the lower strike. So, we’re going to buy to open. We’ve to change this to the RUTW on Schwab. Again, your broker, it might be a little bit different. We’re doing the December twelfth, and we’re going to do the twenty three-90s.

And we’re going to sell to open the twenty three-80s.

And look at that, we got a nice big credit, bigger than we’re used to on the puts. So we got four fifteen. So again, don’t double up, don’t try to make up for lost ground, but this is a really nice credit right here.

I’m going to review my order.

Okay, so I’m going to go ahead and send that out.

So the midpoint’s four twenty ish about.

It’s moving around a little bit. I’m going put the limit price at four twenty.

Let me just put that out. Can go ahead and place that trade. I’m going to send this out now.

Alright, I am sending it.

And now I’m going to place the trade myself.

Oh, wait, you know what? I don’t think I put in a limit price. I better do that.

Yeah, my limit price was wrong. So, I’m putting four twenty as the limit price.

Oh, and it just went down to three ninety five. I’m going leave it at four twenty though. I’m going to leave and see what happens.

Do you have gotten filled at four twenty?

Okay, so my order has been received. If we don’t get filled at four twenty, I’ll send another alert later, but we’re going to give it some time to play out.

All right, So I still have not gotten filled. It looks like some of you are getting filled at four twenty, but I’ll let you know if I get filled. But in the meantime, it looks like some of you are getting filled, so that’s positive. We’ll see what happens as the day goes on. Let’s see.

Yeah, Russell hasn’t moved that much since I placed the order, so hopefully we’ll get that filled.

So a question from Rob M. Must we exercise today’s put spread now? So today’s put spread, remember, this was an AM trade. When you have a spread or an option that is an index option that expires on the third Friday of the month, we have the choice between the Monday I’m sorry, the AM trades and the PM trades.

AM trades mean they expire at the open PMs are at the close. We chose the AM. It was a better price, more liquidity, what have you. So at the open that expired worthless.

I’m sorry, didn’t expire worthless. I wish it expired worthless. It expired in the money. So the trade would be exercised automatically.

You don’t have to do anything to close. Dollars one thousand per spread comes out of your account automatically. It’s one of the nice things about trading options. You don’t have to exercise anything.

It happens automatically. So money comes out of your account. So one thousand dollars comes out per spread.

We collected, I think two zero five was the official price on it, so two zero five dollars So the net loss on that would be seven ninety five. But you don’t have to do anything when these end up in the money. You never have to do anything. Or when they’re out of the money and the trade works out, you don’t have to do anything. Everything happens automatically. The only time you have to do something is if you’re closing it early. That’s the only time you have to physically do something.

See.

Rosa says, Have you done any back testing on the calls when the puts did not work? We did. And the calls during down markets had extremely similar results to the puts in all markets. So yeah, that’s in a down market, it should work quite well.

HAC says, is it a net debit? No, it’s a net credit. Really, really important. Always in this service, it’s always going to be a credit.

The only time it’ll be a debit is if we’re closing out a trade early. In that case, then we have to pay something to close it out. When it’s a winner, we’ll be paying less than we took in. If it’s a loser, then we might be paying more.

We will be paying more. But anytime, any opening trade is going be a credit, always. So if you can’t figure that out, then you’re on a call, the long, the one that you bought is higher than the one that you sold. So we’re buying the twenty three point nine zero call, selling the twenty three point eight zero.

And if we were doing a put spread, would be the opposite. We would be selling the higher strike price. So that’s really important.

A lot of people are starting to get filled at four point two zero. I don’t know if I did yet.

Let me see.

Yeah, it doesn’t look like I got filled. Looks like some of you guys are getting filled ahead of me. That’s okay. Like I said, if we can’t get filled in a few hours, I’ll lower the limit price a little bit, but that’s not a problem. Glad you guys are getting filled. Some of them at Schwab.

Larry says, My spread doesn’t close till the end of the day. How do I get out early on this type of trade?

So if you were to get out early, let me take a look at the prices real quick, because it wouldn’t I don’t think that will make much sense. If we’re looking at the November twenty one, let’s see where the 2390s Sorry, just looking at the prices.

I know it actually looks like you could get out. Yeah, so if you wanted to get out early, then you would buy to close the higher strike price and sell to close the lower strike price. So you’re basically doing the opposite. What you can do, let me share my screen so you can see how to close that really easily.

Hang on. I’m just getting this set up for a second.

Yeah. Just give me a moment. This is a little bit slow.

Okay, so I’m going to share my screen here.

So, I’m going have to show you on a different position because today’s expired, but this is just an example. So, for example, I’ll show you the November twenty eighth.

So if I was going to close the November twenty eighth, this is not a recommendation, but if I was going to close it, one of the easiest things to do, you click on the position and click close positions.

And again, your broker might be a little bit different, but it’s going to be pretty similar. And then you want to make sure you have both legs of the spread.

So in this case, this is again next week’s position, But you hit close selected.

And then you’ll see here it automatically will set it up, so that you are which strike is this?

So, yeah, so you’re selling to close the lower strike, you’re buying to close the higher strike, and you’ll see a midpoint. There’s a debit here because again, you’re paying to close it out. So, there would be a debit, but that’s how you would do it. That’s the simplest way. So if you click on the position and hit close position and make sure you select both legs of it, it should fill in automatically all the parameters. And the only thing you need to do is change the limit price. So, I’m going to clear that so I don’t do that accidentally.

And that’s how that is done. So, one of the really nice things about the way the brokers set these things up is that you can if you go to close the position, it will happen automatically.

But I just wanted to check something on today’s prices because, yeah, so if you close it early, it doesn’t make sense because the if you’re closing today’s early, because the 2390s, the midpoint is about sixty eight bucks and the 2380s is about, let’s say, fifty seven, fifty eight, so it’s higher than ten points.

Because there’s volatility, there’s still some time left. So, you would actually lose more than if you just let it expire and you lose the full ten points on it. So, you know, be really careful if closing out a losing trade and if it’s a trade that’s deep in the money, make sure that you’re never paying more than ten points because ten points is the maximum we can lose, right? If the market goes to zero on put spread, the market goes to zero, the maximum we can lose is ten points. So, if the midpoint between, you know, the spread is more than ten points, there’s no sense in closing it out. So, that’s one of the reasons that when a trade goes deep against us, I’m not looking to close it out because we’ll do better just letting it expire and having it assigned and losing the ten points. So be really, really careful about that if that’s something you’re looking at closing a position early.

Jay Shipp says, so do we want the Russell to close under twenty three point eight zero?

For the call spread, yes. For the put spreads, you know, obviously no, but the call spread, yes, we do want it to close below twenty three point eight zero. Twenty three point eight zero is where it starts to get in the money between twenty three point eight zero dollars twenty three point nine zero dollars you know, then we’re depending on where at twenty three point eight zero dollars So basically if we’re selling it for four point two zero dollars our breakeven is two thousand three hundred and eighty four point two.

Above two thousand three and ninety, that’s a max loss situation for the call spread. But again, this time instead of getting two fifty for the spread, we’re getting about four twenty. So our max loss here is five eighty. So, you know, a bit better.

Dave246 says, what if I didn’t take the AM option? What should I do? Should I do nothing or close it out now or later? As I mentioned, don’t close it out because right now the spread is wider than ten points.

The maximum you can lose is ten points. So the only time you ever consider closing the spread early on a day like today, especially where we’re deep in the money, is if it’s going to be less than ten points. So, if the market continues to rally a bit and we get closer to twenty three point eight zero, maybe that shrinks. But again, with just a few hours left, it’s going to be close.

You know, the market would really have to rip higher for that to change significantly.

So WJO, I meant to get to this question. I’m wondering if it was the same person who emailed me yesterday. Meant to get this. What do you think about placing stop loss at the short strike on our weekly credit spread to control risk? A single max loss can negate three or four winning trades, so avoiding those full losses seems like a significant advantage.

So great question, WJ. I believe you’re probably who emailed me yesterday and I meant to get that. So thank you for reminding me.

That won’t work because as the market starts, let’s say we’re in a bull put spread and twenty three point nine zero is our top strike that we’ve sold. As the market retreats and gets closer to twenty three point nine zero, that spread is going to increase in value and will often be higher than the ten points.

So, using that twenty three point nine zero as a stop price is usually not going to be profitable. Really, makes these trades profitable is the time decay. And, you know, if let’s say we have a situation where the market retreats and it’s hanging around two thousand three hundred ninety, two thousand three and ninety five, two thousand four hundred, and let’s just say it stalls for a week or two, you’ll see that option spread the price decay over days until we get to really the final day where really all that premium will evaporate. And so that’s what we want.

But as the market moves and especially when it moves down and volatility increase, the option prices increase. So if you put a stop at the top strike price, you’re going to be getting out with a loss and probably a larger loss than the max loss, unless that happens to be, you know, on very last day and possibly the day before. But really, that’s not going to work. And one thing with trading options is stop losses, either on the option, you know, let me just say this.

Using stop losses in something like this is not going to work because when a trade goes against you, especially on a bull put spread, volatility is increasing. So the option prices are moving higher and it’s not going to work. And you’ll probably even take a bigger loss than the max loss if you just let it evaporate, I’m assuming if you let it expire.

So that’s really important.

Beth H, yes, thanks for the reminder. I was going get to this. The market closes early on November twenty eighth with historically light trading around the holidays. How should we handle the upcoming November twenty eighth trade? So I will be here November twenty eighth to put on a trade, possibly close out the trade, what have you. But yes, it will typically be lighter trading.

So looking at the option that has the most open interest will be important. I’ll certainly be looking at that, you know, like I always do. But yes, November twenty, we will be here making that trade. If you can join us after Thanksgiving, tell the kids and grandkids to be quiet or better yet, invite them in. Show them what you’re doing and show them how you’re going to make some money and help send them to college or pay for their wedding or how they won’t have to take care of you in retirement. So, but that could be a neat little thing for anyone who wants to show family exactly what they’re doing and what we do here.

Let’s see.

So Mark J. H. Says, Where do we pick AM expiration on Schwab monthly? So we place a trade remember, this is only on the third Fridays of the month for the expiration. So for example, today, November twenty first, is the third Friday. Next week when we place the trade, the December nineteenth expiration, which is what we’ll place, that will be the third Friday. So when you go to Schwab, the default is RUT and that will be the third Friday.

Those will be the only choices you have. When you hit that dropdown menu and choose RUTW, that’s when you get all the other dates. But as long as you just have that RUT in there, the December nineteenth would be the the only one and that is the AM option. If you can choose the RUTW and choose December nineteenth, that will be the PM option. So on Schwab, that’s RUT for AM, RUTW for PM. And again, every broker might be a little bit different.

John R. Got filled at four forty. That’s nice. Glad to see it.

MOS says, with this new strategy, what do we want the index to not be at? We don’t want it to go up over twenty three point eight zero for this particular trade. So, we have a bearish position on. So, just like in all the other positions that we have done, where they’re bullish positions and we basically don’t want the market to fall three percent, here this is a bearish position. We don’t want the market to go up three percent.

So, question, I didn’t take the AM option. What should I do now? Close or let it expire? Again, we’re going let it close because the spread right now is higher than ten points. If you can get lower than ten points, then you can go for it, but I don’t see that in the quotes that I’m looking at. That might change as we get closer to the end of the day if the market goes higher, but you make sure that you’re not paying more than ten points for it because that’s more than you would lose if you just let it expire.

ERS is why we changed direction. Are you seeing something in the market trend wise? Yes. So as I mentioned, I am seeing we’re seeing negative breath or weakening breath.

We’re seeing fewer new highs. That concerns me. The fact that yesterday the market couldn’t stick the landing after all that positive news, that really concerned me. You know, I would not have been surprised if the market had retreated a bit, you know, off of those highs.

That wouldn’t have bothered me other than in relation to our trade. But from a macro standpoint, you know, if we had closed higher by a percent instead of two percent, fine. At least it would have been positive. But the fact that it swung so violently down and turned out to be a pretty bad day overall, That’s not a good sign at all that it couldn’t hang on to those gains and there was so much selling.

There has been quite a bit of technical damage. The fact that the financials and banks are rolling over, that concerns me. Again, not saying that we’re in a bear market, but I do expect that we are going to have some difficulties in the next couple of weeks. So that was why I felt it was prudent to put on a bearish position.

And also, do have these two bullish positions still on the books. So that’s a hedge in case we go lower.

See.

Paul Connolly says, I’ve always used good until canceled rather than day only. Does that matter? I prefer day only because if you don’t get filled today, you know, anything can happen in the market Monday morning and let’s say it opens at a wildly different price and the market makers see that you have your limit price, you know, they can really screw you. Market makers will screw you if they have the opportunity to.

So, I always do day only. And the other thing too is, you know, when we put the trades on Friday, I like having the two days over the weekend because, you know, that gets us two days closer to expiration since we’re selling credits for a little bit more time decay as well.

Really, even if you want to put the trade on Monday, I generally don’t recommend that. Even if you do, have the order expire on Friday and you can always go back in Monday morning, see where the market is and make the trade that way. You don’t want to give the market makers a chance to see that you’re willing to sell a credit at four dollars and suddenly, but the real market’s at five dollars so they only give you four dollars So, do it day only.

S. Vetter says, Why not go out further from the price, two thousand four hundred and ten and two thousand four hundred, to provide more protection? So, you know, every week, well, let me answer it two ways. One, in the back test, three percent is what worked the best for us.

That’s a really important reason why we’re sticking with three percent. But the other reason is, yes, you can go further out, but then you get less of a credit. Same thing when we’re putting on bullish positions. We can put the strikes much further down, but then we’re earning less money.

So there’s always going to be that trade off. How much risk are you willing to take versus how much reward? So the more risk you’re willing to take, if you only wanted to go out two percent or one percent, you’re going to make a lot more money or you’re going get the credits going to be a lot higher. And when the trade works, you’re going to make more money, but you have a higher chance of a loss.

Vice versa, you put the strike prices further away, so it decreases your chance of a loss, but it also decreases the credit and how much money you’re going make if the trade wins. So there’s always going to be that trade off between risk and reward.

As I said, three percent is our kind of magic number from the backtest. That’s what worked the best. And let’s face it, has been working really well since we’ve been doing this other than the last two weeks.

You know, we’re still at an eighty eight percent win rate. We’re still crushing the S and P five hundred. So, it’s just been the last two weeks have been really rough. In the backtest, again, every loss that we took in the backtest was a max loss.

We did not trade out of them. Every win and every loss went to expiration. So the numbers that we’re seeing in real life are no different than the backtest. Of course, I don’t want to let them become max losses in real life.

Yesterday, we just got caught when, like I said, the trap door opened underneath the market and it tanked. I was planning to try to get us out.

So, you’re trading, if you are feeling a little concerned and you feel like you need to take on a little bit less risk, then do what’s going to work best for you, help you sleep at night, just understand you’re going to make a little bit less money, You’re going to get a lower credit. And vice versa, if you’re super aggressive and you’re willing to take on more risk, you’re going get paid more. So just always look at it, like I said, from your risk tolerance, how much you can afford to lose and all that. So, let’s get to one more question.

Let’s see.

Sorry. Just going up.

JBLR says if I’m not filled at four twenty, do I increase that value to get filled? You’d actually have to decrease it to get filled. If they’re not willing to pay you four twenty, they’re not going to be willing to pay you four thirty or four forty, so you’d need to decrease it. So, I still haven’t gotten filled yet.

I’m going watch it for a couple of hours. I’ve mentioned this before. We’ve had situations not too often, usually we get filled right away, but we have had situations where I got filled at one in the afternoon. So, I’m going to give it a couple of hours to see what happens.

If I need to change the limit price, I will send out a new trade alert. That’s not to put on a second trade. It just means I’m changing the limit price on it to make sure that everybody gets filled. But I’ll do that probably after lunch if we haven’t gone filled.

Like I said, I want to give it a few hours since historically the very few times we haven’t gotten filled right away that’s been the case.

So, I am going to wrap it up here.

Have a fantastic Thanksgiving, everyone. Again, we will be back on Friday as normal, even though it’s Friday after Thanksgiving. You know, might still have some tryptophan, might be a little sleepy from the turkey and the wine, but we’ll get right back at it, hopefully we’ll have better news next week. Thanks for all being here. And I’m very thankful that you are all here every week with me going on this journey with me. So, have a great Thanksgiving. We’ll talk to you next week.