Weekly Income Alert – December 12, 2025

Welcome, everyone, to Weekly Income Alert. I’m Marc Lichtenfeld. Glad you are with us. You may notice something a little different about me.

Well, they don’t give this hat to just anyone. Yesterday, I won it for having the highest winning percentage of any service at the Oxford Club. So, congratulations to those of you who’ve been around with us since the beginning. The eighty six percent win rate, right in line with what our back tested results were.

Now, unfortunately, today, we’re not adding to that win rate because our call spread is going to expire and we’re going to take the maximum loss. So, I kind of rub our faces in it. We’ll get rid of that for now. But it was a good day to be recognized that we did have the winning of service at the Oxford Club.

So, congratulations to all of you who have been trading it successfully. Now, as I mentioned, we’ve got the call spread today.

And as you know, the market went straight up after we added the call spread, which is a bearish position. Again, quick review at the time, markets were falling and I had seen some deterioration in the market, not just price, obviously, but things that concerned me. We were seeing, you know, new highs were falling, meaning that we had fewer and fewer new highs. We saw breadth, so more stocks were falling than were rising. And there were some other things too that just made me a little uncomfortable. So, I did think it made sense at the time to take a bearish position.

Obviously, market went against us and has gone straight up. So, that’s good for probably all of our other positions, not just Weekly Income Alert, all the other things. I kind of look at it as a little bit of a hedge in case the market continued to deteriorate. That didn’t happen. So, we are taking the loss.

Little bit of silver lining here is that the amount that we took in as the credit is higher than when we do a bull put spread. So, the loss wasn’t as big as would be normally when we’re in a bullish position. So we had a four twenty dollars credit. So the max loss will be five eighty dollars Now, I guess there’s chance the market crashes today and goes down seven percent, eight percent, but probably not. The good news is that our other two bullish positions are looking really strong. And right now, you know, there’s no need to cover anything. I’ll certainly let you know if we’re going to get out of a position early.

But right now, the plan is to let them expire. As I mentioned last week, we have a position expiring on December twenty sixth. We will not be doing a live broadcast on the twenty sixth. We’re going to do it on the twenty third because we are actually closed on the twenty sixth. It’s going be a very, very quiet day. So, we’re going to do the broadcast on the twenty third, put on the new position on the twenty third, but that position that expires on the twenty sixth.

If we need to get out of it, you know, I will certainly send you an alert on the twenty sixth. Market is closed, obviously, on Christmas Day, and I believe it is closed early on Christmas Eve Day. I believe it closes at one o’clock.

So, that’s the schedule. So, we’ll send you a reminder and everything. But just, you know, put it on your calendar. December twenty third is going to be the trade day and the broadcast that week.

So, I want to welcome all of you who are here and including for the first time ever, we have our moderator, James, is here live in the studio with us. So, great to see you as always, James. Thanks for being here. He’s waving, thumbs up.

And great to see all of you, and especially those of you who are new. Welcome to Weekly Income Alert. It’s a great service. I know you’re going to love it each week.

We are receiving income. We’re collecting a credit. Really, really important. If it’s your first trade, you want to make sure you’re getting a credit.

It’s not a debit. We’re never putting money out. We’re bringing money in. So, that’s how the new trade works.

Now, as far as today’s expiring trade, which is a loss, when we have a loss, money does come out of your account. So, the process is we bring money in when we open the trade.

Hopefully, it expires worthless, and that’s been the case for eighty six percent of our trades.

It expires worthless and we don’t have to do anything. You don’t touch it, you don’t close it, it just expires, it goes to zero and you keep all the money. If we do have a loss, like today, then money comes out of the account and the maximum loss is one thousand dollars per contract minus whatever your credit was. So, again, we took in four twenty dollars on the trade that’s expiring today. Dollars one thousand comes out of the account at the close today, so the loss will be five eighty dollars per contract.

When we do collect money, and we have a winner, let’s say today we’re able to collect two fifty dollars if that expires worthless like we want. And remember, worthless, decay, going to zero, those are all good things in this kind of a trade. When that goes to zero, nothing happens, and you just keep the money. So with that said, and we will get to your questions.

But with that said, let’s get to today’s trade. Let me just check the market real quickly, make sure it hasn’t gone crazy my last look and it has not, so that’s good.

Let’s, I’m going to share my screen and we’ll get to the trade.

All right.

You guys can see that. We’re trading the Russell two thousand. And as I’ve always said on Schwab, you have to put it in as dollar sign R U T.

On Fidelity, it’s dot R U T. And some of the other brokers might have different ways of displaying it. That’s one of the weird things about indexes. So we’re going to put in dollar sign R U T. Now on Schwab, in order to get the expiration dates that we want, you have to go to this drop down menu and pull down RUTW. If you don’t do that, if you just leave it at RUT, then you’re only going to see the expirations, which are considered the monthly expirations, which are the third Friday of the month.

If you go to RUTW, then you have a lot more choices. So we are going to do the January second, twenty twenty six trade. Now before, actually, I want to mention this before you place a trade so that you know exactly what is happening here.

This trade, when you open a trade on an index in December that doesn’t expire until January, there’s some kind of weird tax implications here that I want to make sure you’re aware of. What happens is because indexes and futures and options on indexes are considered what are known as twelve fifty six contracts, they’re treated differently. If you placed this type of a trade on an ETF or a stock, the trade doesn’t close until January, and then you’d be taxed in the new year, right? So if you made or lost money, that would go to your twenty twenty six taxes.

With these twelve fifty six contracts, again, which are index options, it’s treated differently. The IRS treats the trade as if it’s closed on December thirty first. So wherever that trade is on December thirty first, that is going to be your tax situation. So if we’re up one hundred dollars even though the trade’s open, as far as the IRS is considered, you will be taxed as if you have one hundred dollars gain.

If you have a loss, then you can take it as a loss.

Once the trade actually closes in January, then the rest of that goes to your twenty twenty six taxes. So, for example, let’s say we sold a credit spread for two point five zero dollars or two fifty dollars On December thirty first, it was worth one hundred and fifty dollars So again, you’d have one hundred dollars gain, you would be taxed on that one hundred dollars gain. And now your new cost basis would be one hundred and fifty dollars So if that expired worthless in twenty twenty six, you would be taxed on one hundred and fifty dollars not the full two fifty dollars because you were already taxed on one hundred dollars in twenty twenty five.

And of course, if it changed, let’s say you had the one hundred dollars gain in twenty twenty five, and then the trade goes against us in January and we lose money, then again, your new cost basis is one hundred and fifty instead of two fifty. And you would adjust your loss accordingly. Your broker will take care about all that for you. You’re not going to have to do much with that.

But just so you know, because anytime there’s going to be some real tax implications, I want to make sure you know that before you get into the trade.

One other thing, if you’re new, and we’ve talked about this before, so those of you who’ve been around know this, but if you’re new, trading the index options rather than the ETF does have a tax advantage. And that is that you are taxed at sixty percent of the gain is taxed as a short term, I’m sorry, as a long term capital gain. Sixty percent of the gain is a long term capital gain, even though our length of the trade is only three weeks. So sixty percent is a long term capital gain, forty percent is a short term.

So there is a tax advantage when you’re winning, as we have been. If you’re trading the ETF or a stock, let’s say, then in a three week long trade, your entire trade is taxed at your short term capital gain rate, which is your ordinary income tax rate. So those taxes are going to be much higher than trading the index options. It’s one of the reasons that we trade the index option rather than the ETF.

So, really good tax consequences for trading it this way. But again, for the next couple of weeks, where we’re opening a trade in December and closing them in January, be aware that the IRS will, it’s called mark to market, they’ll mark that trade as if it’s closed on December thirty one for the twenty twenty five tax year, whatever the closing price is on December thirty one. So, I want you to be aware of that.

I assume that’s not going to change anybody’s decision to make the trade, but know, want to be very clear about that before you make the trade so you know what the tax consequences are. And as always, for tax questions, please do talk to a tax professional.

All right, with all that said, let’s get to it. So we are going to trade the January second, twenty twenty six. So you can see we’ve got RUTW selected here in the dropdown menu, January second, twenty twenty six.

And oh, and I did not put in vertical put spread up here where it says strategy. So that’s really important. You want it to be a vertical put spread. If you’re new, you want to be trading this together. You don’t want to open one leg of the trade and then in a separate trade, open the second leg. You want them together. That way you can control the price, and I’ll show you exactly how to do that.

Because you don’t want to have exposure if you got filled on one leg and didn’t get filled on the other. Now the trade is not what you want it to be at all.

So we’ve got the vertical put spread, and we are going to sell to open.

All right, let me, there we go. Okay, so now we’ve got, as you can see when you put vertical put, it automatically populates both legs of the spread. And when you change the date on one of them, so January second, it automatically changes the date on the second one.

So we’re going to go down to the 2500s.

We’re going to sell to open the two thousand five hundred strike, and we’re going to buy to open the two thousand hundred and ninety strike.

And the credit, pretty small this week.

You can see it’s one point six five dollars Yeah, that’s smaller than I was anticipating this morning.

But that’s what it is. The market’s been going straight up. When that happens, volatility comes down and we don’t get a big credit.

When markets are volatile and when they’re going down, that’s when the credits get larger because they’re riskier there. So this is gonna be probably the lowest credit that we’ve seen since we are in this trade, since I think we started in May. So, yeah, this is going be the lowest one. Don’t love to see that. I usually like to see it at least be two dollars If you wanted to, you could move up your strikes a little bit and try to get a little bit higher credit. I am choosing this one for a couple of reasons. There’s not a tremendous amount of liquidity on the January second options because it’s right after New Year’s.

So, the 2500s and the 2490s had a bit more open interest than the others.

And then also, it just gives us a little bit more wiggle room if the market falls. As you guys know, when we trade this, I tend to go a little bit more conservative than more aggressive, so that if the market slips, that we have a little bit more room. So if have to choose between two strikes, in other words, I’m usually going pick the lower strike just to give us a little bit more buffer in case the market falls.

We have the sell to open Russell, January second, two thousand five hundred buy to open, 2490s. We’ve got a credit of one point seven zero As some of you know, I often will put my limit price a little bit lower just to make sure we get filled. But with price so low right now, I don’t want to go lower than this. So I’m going to put the net credit limit price at one point seven zero and see some people are getting filled at one point six five dollars I’m going put it at one point seven zero dollars and see what happens. If you don’t get filled right away, as I always say, give it some time.

Sometimes it can take as long as a few hours. Usually, it doesn’t at all, but there have been times where that’s happened. So just give it a few hours. If I need to change the trade After the broadcast ends, I will send an alert and let you know if nobody’s getting filled but it looks like people are getting filled dollar sixty five dollars six I’m not seeing a dollar seventy coming up yet. But I’m gonna I’m gonna put that and I’m willing to wait for it. So I’m gonna review the trade there.

And so then you can see here, estimated amount one hundred and seventy, you’ve got your commissions, and this would be the amount. So you can go ahead, I know a lot of you have placed that trade, but go ahead and place it. I’m gonna officially send out the trade now.

So I want to make sure I’ve got this right. Sell to open the Russell January second two thousand five hundred put buy to open the January second two thousand four and ninety put. I’m gonna put my limit price at one point seven zero Now I’m gonna submit that trade.

All right, we got that. So now I am going to go ahead and place my order.

So we are done there. I’m going to stop sharing the screen.

And let’s see. Yeah, people are getting filled one point seven zero dollars now, one point six five, dollars one point seven zero. So yeah, So again, not as high as I would like. Always want to see it closer to two and above.

But when the markets are just ripping and hitting new highs or close to it every single day, that’s going to happen.

Markets go up, volatility goes down, and it makes the spreads cheaper, vice versa. When markets go down, volatility increases, so your risk increases, so you get paid more. Remember, in the market, you’re always getting compensated for risk. So when the market perceives lower risk, your compensation is lower. When the market perceives much higher risk, then your compensation goes up. So that’s how that’s been. And if the market continues to go higher, seemingly every day as it has been, then we’ll see some lower prices.

Really only need a couple of days of down markets and the VIX to spike a little bit to get those premiums back up and get a little more juicy. So, I assume that’s going to happen even if markets continue to go higher. And I do expect them to continue to go higher. I don’t see too much on the horizon to really affect things too much.

I mean, you know, here and there, you’ve got some earnings coming out that have been disappointing for some of the tech companies. But I’m not seeing this spread like a disease or a virus throughout the market, certainly not right now. And with interest rates going down, the Fed just lowered rates. I know it sounds like the Fed may be on pause for a few months, But we all know that once Fed Chair Powell is out of office in May, rates are likely going lower throughout the rest of the year, unless inflation really rips higher.

But, you know, I think right now the market is approaching it as don’t fight the Fed. And so, the market probably I’m expecting to continue to go higher. So, that’s kind of my read on where we are right now. So, let’s get to some of your questions.

So somebody’s asking what ticker do I use on Webull? If anybody trades on Webull, if you could help with that, that would be great.

Marc, do you think we have enough members doing these trades now that we are starting to catch the attention of the market makers and they’re starting to play with that number?

That’s a great question. Generally speaking, I would say no. I would say on days that are particularly slow, like when we did the trade the Friday after Thanksgiving, that was a very slow day. And I think we saw, especially at the very beginning, saw those market makers take those numbers way down.

They came back up pretty quickly, but they did take them down. You could see that on January second when we come back. Another reason why I wanted to do the trade on the twenty third instead of the twenty sixth, because the twenty sixth will be very, very slow. So, but generally speaking, no.

Generally speaking, there’s so much volume. And remember, even when we first started with this, back in May, we still had, you know, probably one thousand people just on the broadcast, and then who knows how many more who were not watching live, but then placed the trade throughout the day. So, we really did not see any price irregularities at all. It’s really only been on these days that are extremely slow days, like right after a holiday, things like that.

So, I’m not too worried about that. But another reason to try to stick with your limit prices when we set them and not just kind of take whatever the market makers are willing to pay. That’s really important.

Let’s see, scary to place strike based on fifty two week high.

True, but you could have said that a month ago, could have said that two months ago and three months ago, and ever since we’ve been starting this, the markets have been making new highs every time.

Gosh, how long has this bull market been?

The bear ended in twenty twenty two, So, we’ve been hitting new highs pretty consistently for quite a while now. So, it’s always scary to place any kind of a trade, any kind of a bullish trade, when markets are hitting new highs. The kind of natural inclination is to say, Well, I’m just going to wait for it to come down. And then, you know, six months later, the market hasn’t come down and you’ve missed the boat on six months’ worth of gains.

So, we’re trading credit spreads here or whether you’re considering buying a dividend stock or a growth stock, you know, don’t try to time the market and say, Well, the market’s at fifty two week highs. I’m going to wait for it to come down, because it might not. You might end up waiting. And when it does come down, you might be too scared to make that trade.

When we had that six percent, seven percent drop just a few weeks ago, I don’t think there were a lot of people going, Yeah, now this was the move I was waiting for. Time to back up the truck and buy those stocks.

You know, when markets fall, people understandably get worried, and they want to see some stabilization, so they don’t place those trades. So don’t try to time the market ever, whether it’s trading credit spreads or adding to your portfolio, adding to your four zero one, your IRA. Just make trades based on when you want to buy a certain stock or when you want to place a credit spread. Or what I talk about all the time for long term investors, just do it on a regular basis, whether it’s monthly, quarterly, what have you. Do it consistently no matter where the market is. So, don’t worry about the market being at fifty two week highs because if you had waited, you would have missed a lot of gains over the past months and even couple of years.

Let’s see.

For the twelve point five six dollars does the break up of the spread show in our broker’s end of year statement ten point nine nine dollars Great question. So I believe that it will show you obviously the twenty twenty five tax.

In the ten ninety nine, I don’t believe it will show what’s essentially the second part of the trade for twenty twenty six. Your ten ninety nine is only for the current tax year. So your account statement in your brokerage should have the correct information and your new cost basis. But the ten ninety nine itself should only have what is considered a completed trade for the twenty twenty five tax year. But that’s something you can also talk to your broker about and your accountant. But I’m pretty sure that because I’ve never seen like a partial or an open trade on a ten ninety nine that I can recall. So, it should only be for what is considered the completed trade, which again is the closing price as of December thirty first as far as the IRS is concerned.

So, all right, we’ve got, can you walk us through closing the call spread if we decide to close it earlier?

Sure, so let me get my account set up again to do that.

Just bear with me.

And one of the nice things is the brokers make it pretty easy for you to do that.

Okay, so let me share my screen.

Okay, so these are the lists of the positions that we have open now. And it looks like I did get filled on the January second because this is in my list here. So if you were gonna close out a position, let’s say you were gonna close out, I’ll do next week’s as an example rather than this week’s because this week’s is there’s no reason to close out early this week. The worst situation that you can have right now would be the maximum loss, which is where we are.

If you close out early, you could actually end up taking larger than what would be the maximum loss based if you don’t get a fair price from the market maker. So, when we are looking at a max loss situation like we are now, there’s never a reason to close out early because I have seen prices higher than the maximum loss. Or, you know, if you the maximum loss technically would be ten, that would be the price, right? One thousand dollars If you went into the market, you might get a price of eleven or twelve, which again, you’re buying at this point.

So there’s no reason to do that. Might as well just let it expire at ten and then take that loss. So let’s look at the December nineteenth.

So that’s next week’s trade. So this is on Schwab. Know, each broker can be a little bit different. But if you click on these three bars here, you can say close positions.

And then it gives you a list of the positions. And the really important part here is to make sure that you have selected both legs of the spread. That way, again, like I was saying earlier, you don’t ever wanna have exposure to just one leg of the spread. So you wanna make sure you’ve selected both. And when you do, you hit close selected.

And when you do, you’ll see it populates and the closing trade is already populated here. So here, STC means sell to close.

That’s the twenty four point one zero, and buy to close, which is BTC twenty four point two zero, and it comes in already. You can see what the midpoint’s here, and then you scroll down and you see what the midpoint is for the debit.

And again, remember, it’s a debit, you’re paying money. So here, the midpoint is twenty cents. So if you closed out the trade early, you would close it for twenty cents, you would pay twenty cents or twenty dollars and you’d keep the rest of the money from the credit.

So I’m not recommending that we do that. I do want to try to keep every dollar that we can because especially when the credits are on the smaller side, you know, every dollar counts. So right now, don’t see a reason to. If you’re concerned about the market falling next week, you know, at this point, it would have to fall about one hundred and sixty points in the Russell. So that’d be a considerable move, impossible.

And if the market really took a dive, it could happen. But at this point, I want to try to capture every dollar we can. So I’m not recommending it, but that’s what you would do. You would see what the midpoint is here.

And you would put your limit price where it says price, and you could adjust it. And then you would hit review and close the trade. So, that’s how you do it. So, make sure really, really important that you’re always closing both legs.

You never want to close one and be like, Oh, well, you know, I’m going to stay short. I’m to get rid of my long put and stay short, you know, have that short put in order to try to, you know, make a little bit more money. Never do that. With a spread, when you trade spreads, the whole idea is it’s a conservative trade and that we’ve locked in what our risk is and what our maximum loss is.

So, that’s really, really important.

All right.

Let’s see. All right, somebody just got filled one point seven five Fidelity says both legs closing is the default. Yeah, most brokers, if you’re trying to close a spread, there will be that option to Oh, so if you’re saying it’s the default, you don’t have to choose it. That’s good to know also. Yeah, so some brokers are going to be different. It’ll automatically The default will be to close both legs. With Schwab, you do have to choose it.

But that’s good to know.

Let’s see.

RCBV says, if selling a bear call early, would you then use net credit or net debit? So I understand what you’re saying, but just to get the kind of the wording correct, you wouldn’t be selling the bear call early. You’d be exiting the trade early because we sell credit spreads. That’s the opening trade when we sell because we get money in.

When we close it, we’re actually buying it early. So, when we’re buying, anytime we’re buying one of these credit spreads to close it early, that’s a debit because we’re buying it back. So, you know, we’ve sold something first, collected the money, and then when we exit the trade early, we’re buying it back. So, there’s always going be money coming out of our account.

So, if you bought it back early, like the example I just showed you, where it was a put spread, not a call spread, but same idea, we would then be we would have bought it for twenty dollars back, and that would have closed the position. So twenty dollars per contract would have come out of our account in order to close it early. So that’s how that works. So anytime you’re opening the position, it’s a credit.

Anytime we’re closing it early, it’s a debit. And I know some people, especially first time that they’re doing it or, you know, you just have a fat finger result, sometimes people end up doing a debit by mistake when they’re opening the trade. And sometimes the question is, well, hey, what do I do? And my recommendation is always exit, close it.

You know, you don’t want to ever make a trade and you entered the wrong direction.

And then you’re just gonna hope it works out, right? If you were interested in buying Nvidia, and by accident, you hit sell short, you wouldn’t be like, all right, let’s see where this goes, right? You’d get out of it real quick. Same thing here.

So, you you might take a tiny loss because if you sold a credit I’m sorry, let’s say if you bought the credit for two dollars by mistake instead of selling it when you close it, you might have to exit it for one point nine zero dollars There’s probably going to be a small loss. The market makers do get a tiny spread on each trade. But if you do make a debit trade by mistake when you open the trade, just get out and redo the trade. It’ll cost you a couple of dollars, but it’s not going to be substantial.

So you never want to be in the trade in the wrong direction by mistake and just hope that it works out.

B. Webell says higher net credit is better, right? Absolutely. We want to make as much money as we can. So like I was saying, today was, I think, the lowest net credit that we’ve seen.

Usually, it’s up in the 2s. We’ve had the bear call that we had expiring today was up in the fours because the market was particularly volatile at that point and people were had bid the VIX up and Or they didn’t bid the VIX up. The VIX went up. And so option prices were much higher.

So, but yeah, with the higher the credit, we want to make as much money as possible on the way in for obvious reasons. If the trade works out and it expires worthless, then we keep more money. But also, if the trade doesn’t work out, it lowers our potential maximum loss, right? If we’re selling a credit for two dollars and the trade completely goes against us, so we have one thousand dollars coming out of the account, that’s an eight hundred dollars maximum loss.

If we’ve sold it for four dollars then it’s a six hundred dollars loss. So obviously, the higher, the better. But like I said, when markets are strong, those credits are going to be lower because we’re getting less compensation for lower perceived risk. So when markets start to kind of juke and jive, that’s when our credits are going to be a lot higher.

All right. Let’s see what else we have.

So good question. Someone asked me if we set the strike price based on the credit or some other parameters? So no, it’s not based on the credit. I’m not saying, well, want to make two hundred dollars so this is the strike I’m going to choose. In our backtest that we performed before we launched Weekly Income Alert, we found that about a three percent out of the money was the result that had the optimal outcomes. So, we looked at all kinds of different percentages.

We tested a lot of different ways to trade this different expirations. And what we found was three weeks expiration and about three percent out of the money. And there’s nothing magical about the fact that they’re both threes. That’s just the way the numbers worked out.

But yeah, three percent was where we had the highest win rate and, you know, still getting a really solid return. Now, we could have lowered the winning percentage and perhaps gotten a higher credit each week, but the chance of a loss was going to be higher also. If we did, let’s say, a two percent or one percent, our credit would be much higher every week, but the chances of winning were going to be much, much lower. So, we opted for try to win as often as possible.

And the analogy I always use is hit singles every week, you know? We’re trying to hit home runs. This is not the service that hits home runs. We’re trying to hit singles every single week.

And for the most part, we’ve been doing that where, you know, there are a few games we’re not getting on base. You know, even Joe DiMaggio didn’t get on base in his fifty seventh game. So, it’s going to happen. We’re going to suffer a loss here and there.

It’s not one hundred percent guaranteed. Nothing is. But if we can generate these credits every single week, it’s working out pretty well over the long term so far over about seven months. And like I said, our back test has been incredibly consistent with the real life results.

So, that’s really reassuring. You know, a lot of times, you want to back test, you get out into real life situation, and either because once there’s real money on the line, you act differently than perhaps the back test or, you know, the back test just wasn’t thorough enough. So far, seven months in, which I think is a reasonable amount of time to say, yes, this is working and it’s working exactly as the back test showed. So, I think that’s a great sign and it really makes me very optimistic for twenty twenty six that we’ll just continue to hit singles, you know, almost every week and collect that income over the long term.

And yeah, there’s going to be weeks like today where we’re going to take a loss. But for those of who’ve been with me for a while, we had a winning streak of, I forgot what it was now, it was like twenty weeks in a row or something like that, where, you know, we just on fire and just collecting money every single week. So, really, I’m very, very proud of the team that has put this together and has made this service so consistent with what we tested and what we advertised, to be honest. So real, real good stuff.

All right. Ron just got filled at one point eight zero dollars Nice.

Joe Miami, Merry Christmas. Thank you.

Hopefully we’ll see you next week, though.

How many hats have I won? This was the first year, I think, that we gave out hats. There’s always some kind of bling, So, it’s like a gold chain, which I have one. I have one of those in my office.

Am getting the hat back? I’m getting the hat back. All right. If you missed the opening, this is what I won yesterday for having the highest winning percentage of any Oxford Club service.

So, every year there are different awards. And I have all kinds of plaques and things from all the years I’ve been at the Oxford Club. But this year, I was very excited to get this hat. So, I’m gonna wear it proudly on the plane home tomorrow.

Oh, and there was this.

Yeah, I think I want something like this. This one isn’t mine. But we’ve got this one too.

So yeah, so you know, we give out a lot of bling at the Oxford Club at the end of the year for all the successful services that we run.

All right, let’s get close to wrapping up. Let’s see if there is, let’s see.

So James says, Why is there gonna be a loss today should not happen based on the portfolio? So perhaps you’re new. The trade that expires today, we actually made a bearish bet. So typically, our default is a bull put spread. We’re selling a put, expecting the market not to fall three percent, essentially.

That’s the basic trade every week.

The one that’s expiring today, while the markets were falling, and I was concerned that it was going to fall further, so we did a bear call spread. And because the market is higher, that trade is not working out. So that went against us. So that’s why there is a loss today.

It’s on a bearish call spread, not a bullish put spread, which is what we always do. That bearish call spread, by the way, was the first one that we’ve done in the seven months that we’ve been running. So like I said, the bull put is the default. If the markets change and we’re clearly in a downtrend, then I’ll go back to call spreads.

But for right now, the default is the bull put.

So Alpha says he couldn’t place the trade, not in the buying power. What’s required for this trade for one contract? So you do need one thousand dollars in cash or marginable securities per contract to make the trade. And that’s because if the trade goes against you and you get the maximum loss, dollars one thousand is coming out of your account.

So you have to have at least one thousand dollars per contract. Now, remember, we’re making a trade every week and they’re three weeks. So that would be three thousand dollars But we place the trade on Friday morning and the trade from three weeks earlier expires Friday afternoon. So technically on Friday, we have four trades that are open at one point.

So, you’ll generally need four thousand dollars in cash or marginal securities to place all the trades every week. If you do have that in your account and your broker saying you don’t have enough buying power, definitely talk to your broker about why and what’s required. That could be, you know, something very specific to your account. But those are the general rule.

So, dollars one thousand per contract for everything that’s open. And that’s so that if it goes against you, the money is there so that the broker can take it out. I tend to recommend cash rather than using margin because if you’re using margin and you have a max loss, then the broker will sell your marginal securities and you may not want that. So, if possible, keep the cash in the account.

And that way, if you have a loss, the cash just comes out and you don’t have to sell any stock to make that margin call.

I missed the question, but John is saying, RUT is cash settled, so you won’t be assigned. So I assume somebody was asking what happens if the trade goes against you at expiration? So, yeah, thank you for answering that, John.

So he’s absolutely right. And another very, very big reason why we trade the index rather than the ETF or the stock. And by the way, I realize you’re probably having a hard time taking me seriously with all this bling on as I’m giving you very specific information about the Russell and what have you, but this is important stuff. So the main reason, so that the tax thing that I told you about with the sixtyforty, that’s a nice to have. The need to have, the reason that we trade the Russell rather than IWM, which is the ETF or a stock, is because you can be assigned on an ETF or a stock, and you cannot be assigned early on the index. So, I mean by that is if you’re trading the Russell two thousand ETF, IWM, at any point, if your position is in the money, and even if it’s just one leg is in the money, you can be assigned. So if you’re short a put on the ETF and that goes in the money, the person on the other end of that trade can make you buy the ETF.

That’s gonna be a lot of money out of your account.

With the index, that cannot happen. First of all, there’s nothing to actually buy. So you won’t be put a security.

But it also, it can happen early. With a stock or ETF, it can happen at any time. With an index, it can only happen Assignment can only happen at expiration. So it’ll never be an early assignment.

And if you are assigned, it’s just a cash settlement. So the cash comes out of your account. So like I was saying, if we do take a max loss, dollars one thousand comes out of your account. There’s nothing for you to buy.

Nothing goes into your account that you then have to trade your way out of. So like if you had the ETF and you got put the ETF, well, now you own one hundred shares of the ETF and now you have to decide what to do with it. Do I sell it? Do I hold onto it and see if it bounces?

That doesn’t happen with the index. It’s a cash settlement. Cash comes out of your account, trades over, and you move on. So, that’s the key reason that we trade the index rather than the ETF or any individual stocks.

It makes a huge difference and takes a tremendous amount of risk off the table. It’s something that we just don’t have to worry about and we can just focus on expiration. So with that, I will leave it there. As always, you can fire your questions at me at the mailbagoxfordclub dot com.

I can’t give personal advice, remember, but certainly happy to answer questions about, you know, kind of the procedure and what have you. If there’s something going on with your brokerage account, though, I do recommend talking to your broker because they’ll be able to talk about what’s happening in your specific situation. So, I hope everybody has a great weekend, and I will see you next Friday.