Weekly Income Alert – May 22, 2026

Welcome to Weekly Income Alert. I’m Marc Lichtenfeld. Glad to see everyone here today ahead of our long weekend. Hope you have some good plans heading into this three day weekend, and hope it’s a meaningful Memorial Day as well, always remembering those who gave the ultimate sacrifice. It’s not just about barbecues and long weekends. Never lose sight of that. But do have some good news today.

As you know, we closed out the trade early on Wednesday, and I’ll get into it in a second. I know I saw some people saying that they did not close it out. So real briefly, if you ever miss a trade and then you ask me what you should do, I’m not allowed to tell you. I can’t give personal advice. That’s very, very much against the rules. So, I can’t say, well, since you missed the trade, here’s what you should do.

I didn’t see anybody in the chat asking what they should do. I just saw them saying, I missed the trade. Hopefully, it’s okay. So, as a general statement, here is what I will say if you missed the closing trade on Wednesday.

Basically, we’re in good shape. It should expire worthless. You don’t need to do anything. You know, you might want to keep one eye on the market this afternoon just to make sure something strange hasn’t happened and markets have fallen off a cliff. I don’t expect it to. I don’t see why it would. But never say never.

There’s nothing like one hundred percent certainty in the market. So, you might want to just keep one eye on the market late this afternoon if you’re at all concerned. But generally speaking, you should be okay to let it expire worthless.

So here’s what happened on Wednesday.

Here’s my thinking. And, you know, I know many of you did read the alert and you knew that it was really about managing the risk. It wasn’t about predicting the direction of a trade or the market. So on Wednesday, the Russell had fallen to as low as twenty seven point two two.

So we were within seven points of our strike price and really about nine points of breakeven. So, it was getting pretty close. We were on thin ice. Then the market bounced.

We’re at about twenty seven point five zero. And that’s when I decided to pull the trigger on closing out the position.

Had we not had Nvidia reporting that afternoon, I’m not sure what I would have done at that point, to be honest. I may have closed it out anyway and taken the gain. I may have watched it tick by tick and made my decision perhaps a little bit later. I really don’t know.

But the fact that Nvidia was reporting in the afternoon, to me, there was a very possible significant outcome of the earnings release. And as I mentioned in the alert, one of three things was going happen. It was going to be a non event. It was they were going to blow out earnings like they usually do in the market would rally or they were going to disappoint and the market would fall.

And at that point, if the market fell, then our trade starts to run into trouble. So I actually thought that it being a non event was the least likely. I did expect the market to move one way or the other on the earnings. And then later that afternoon, I saw a headline come across my phone, Nvidia disappoints.

I was like, oh my gosh, tomorrow could be a wreck. It ended up being a non event, pretty interesting. And the market ended up rallying and Nvidia stock really didn’t do very much on Thursday. So, that’s what happened.

So going back and thinking about this all day yesterday and this morning, I really was thinking that if I had to do it again, I would have made the same decision one hundred percent of the time because it was about managing the risk. You know, if you watch any videos on YouTube and option videos and what have you, especially when you’re selling spreads or selling covered calls, naked puts, many of them will suggest that you shut the trade down when you have about a seventy five percent to eighty percent profit that you just close it out right there.

We typically don’t do that here. We typically let the option expire expire worthless so that we can keep one hundred percent of the premium. In this case, with about seventy five percent of the profit and this possible very binary event happening within a few hours that could set us back significantly. You know, if we were one hundred points, one hundred and fifty points away from the strike price, yeah, maybe I would have given it some room for sure.

But we weren’t. And the fact that we had gotten so close just, you know, a few hours earlier, maybe say, you know what, we’ve got seventy five percent of our maximum profit with two days left and a very significant event happening in a few hours. It makes all the sense in the world to take the profits right here and right now. So that’s what we did.

And when you look at the great traders in history, they’re not the ones that have the greatest predictions that know where the market or individual stocks are going. It’s the ones that manage their risk.

Same thing, you know, when you look at great poker players, they’re not the ones that get all the great cards. They’re the ones that manage their risk. They know when to, like the song says, when to hold them and when to fold them. So really, that’s what that trade was about. It was about managing the risk and not willing to take a chance on giving up most of our gain when, you know, we could just take it off the table and put it in our pocket and move on. So that was the decision that I made.

I’ll stick to it. Market ended up going higher. So we did leave a little bit of money on the table, which, you know, I acknowledge was a possibility in the alert. But again, managing risk is really, really important.

And especially when we have put spreads, you know, where volatility is low, like the environment we’re in now where we’re not generating a huge premium, you know, if things swing to a loss, you know, those losses can mount fairly quickly. So, know, we want to be very observant and, you know, very deliberate about how we are managing our risk and taking profits. So that being said, I’m not looking to grab profits as soon as we hit seventy five percent, eighty percent of our maximum gain every time. This was a very specific reason that I did that based on where the market was and what was happening.

So, next week, if we’re two days out, I have seventy five to eighty percent of the profit, I may not do anything. I may just let it go to expiration like we usually do and keep one hundred percent of the profit. But that was the thinking on Wednesday. And like I said, I would make that decision again and again and again.

I think it made a lot of sense. For those of you who did not see the trade or did not decide to act on it, again, you should be in great shape today. So another win. So a really good outcome for us.

Market cooperating. And, you know, again, we’re back on the winning side of things. So great news all around. I want to say hello to all of you out there.

I see David WH in Lynnwood, Washington. He was first today. I don’t know what happened to Douglas in Rhode Island. Maybe he started his weekend early.

Some new people I see, Paul from Pennsylvania. We’ve got George S, first timers. So welcome, Maria NNZ, right here in the beautiful Sunshine State. So great to see all of you. So, what are we doing this week?

For those of you who are in Oxford Income Live yesterday or who subscribed to Technical Pattern Profits, I go through kind of what I’m thinking about the markets. And yesterday in Oxford Income Live, mentioned that I was really trying to be very observant. My antenna had been twitching for a while, and I’ve mentioned it here because I was seeing all kinds of indications in the market that had me a little concerned.

Many of those have kind of backed off at this point. Breadth has improved.

We’re still seeing some things that maybe are a little bit concerning, but I’m not as concerned as I was the last week or two. And the example I gave or the metaphor I gave yesterday was it’s like you’re driving down the street and you see a green light way ahead in the intersection. And you know, it’s been green for a while. So it’s not yellow now.

You don’t need to hit the brakes now. But you realize that it could be at some point that there is a chance that that light is going to turn yellow and eventually red. That’s where we are right now. The light screen.

I’m not particularly worried. Actually, there’s a lot of things to like in the market right now. That being said, we’re going to stay very observant and be tuned into what the market is telling us. Right now, it’s telling us full steam ahead.

Again, that could change at any moment. The market, as you know, is a living, breathing organism that you know, likes to mess with people’s expectations. But right now, things are looking really good. So we’re going to go with another put spread.

So let me go ahead and share my screen, and we will get this party started. And then I’ll get to your questions in just a minute.

Right, so this actually got started right. So let me go back to trading. Actually, me just stop sharing this for one second.

Get me get back to the screen that I meant to get to.

Okay.

I will share it one more time.

Anybody have any big plans for the long weekend? Put them in the chat.

I’m going to see the new Star Wars movie. I’m not really a huge Star Wars fan, but my wife is, and she wants to go.

And I’ve actually heard, it seems like the reviews are not good. So it might be a long day for me tomorrow, but the things you do for love, right? Okay, so go to trade. And for those of you who are new, I’m in Schwab. Schwab is the brokerage that I use.

It should be fairly similar in your brokerage. There are going be a few things that may be a little bit different if you’re not in Schwab.

So we’re going to choose dollar sign R U T as our ticker symbol. That’s the ticker for the Russell.

In Fidelity, I believe it’s dot R U T. Some of the other brokers may have a slightly different symbol. And then we’re going to change this to vertical put.

All right. Now, here is what could be the confusing part if you are new. If you are not new, you’ve heard me say this a million times. In Schwab, the default is RUT. If you go to the expiration dates, it’s only the monthly expiration date, which is the third Friday of every month.

In order to get the weekly expirations, you need to change RUT in this dropdown menu to RUTW.

Okay, when you do that, it gives you a lot more choices. It gives you the weekly options, and that’s what we’re trading. So we are going to be trading the June twelfth expiration, and that’s because we trade these positions three weeks out.

So far, every time we’ve done it, our expiration have been three weeks from today. We are going to let me just double check where the market is, see if my numbers have changed.

It came down to slightly. Let me see real quick where we are. Okay, so we are going to select. We are going to sell the twenty seven eighties.

And we are going to buy the 2770s. These are puts. Okay, really important. We’re selling the 2780s, buying the 2770s. Now, you’ll see there are three numbers here.

The market price is one point seven zero and says CR, that’s credit. Really important. You always want to make sure you’re getting a credit. If it says Doctor, then you have something wrong. Maybe have these numbers inverted, but you always want to receive a credit when we are opening the trade.

The midpoint here, this is the number in the midpoint. This is between the bid and the ask. We never ever, ever are trading at the bid or at the market. We never are putting in a market order here because you can see the drastic difference here. The midpoint is sixty five, sixty cents away from the market price.

And if you trade at this price, this bid price, the market price, you are getting screwed by the market makers. They’re taking advantage of you. You should be able to get filled around this price. It won’t necessarily always be right at that midpoint.

You might have to come down a nickel, maybe even a dime sometimes. Sometimes you get filled above it. But this is the good guide for where you should be placing your order. So again, so we are selling the two thousand seven hundred and eighty puts June twelve expiration, buying the two thousand seven hundred seventy puts June twelve expiration.

The midpoint here is two forty.

What I typically do is I put my limit price a nickel below just to increase the chances of getting filled. You are welcome to try to get that extra nickel, try to go a little bit higher. If you don’t get filled, you can always cancel it and come back down. I’m going to put it at two thirty five.

Reviewing my order, making sure this all makes sense.

And it does. So now go ahead, place that trade and let me know if you get filled. I’m going to send the trade out to everyone.

People are getting filled at two forty. Great to see.

Right. Twenty seven eighties, twenty seven seventies.

All right. I am sending it out.

All right, I sent out the alert now.

And interestingly, so the official track record actually will probably be slightly below the perhaps your orders. Actually, I got filled immediately. Where did I get filled? I got filled at two thirty five.

So I’m seeing a lot of people getting filled at two forty. So because I put put my limit price typically a nickel below to ensure that we’re getting filled, very often the official track record, which is based on my entry prices and exit prices, will be slightly less than what you’re actually making. So for everybody that got filled at two forty, I’m getting filled at two thirty five. You got a better fill than I did.

So whenever I quote these official track records, if you followed me exactly according to every trade that I make at the time that I recommend it, chances are your numbers actually would be slightly better than the official track record.

So DRO says, Mark, are you still preferring the AM options? That only applies to the third Fridays of the month.

It’s a little bit complicated if you’re new. Options expire in the afternoon at the close of the market. The third Friday of the month, there are two expirations. There’s an A. M. Expiration, which is the opening trade or the closing trade, the PM.

If you choose the AM, the last time to trade that is Thursday afternoon at the close. But the opening trade on Friday morning will be how the trade is marked, you know, with final prices.

But that only happens on the third Friday. So when we’re trading on the third Friday for that third Friday expiration, which will be the case next week, we choose either the A. M. Or the P.

M. Options. I typically choose the A. M. Because they have a lot more liquidity, a lot more volume, a lot more open interest.

Once in a while, we have traded the PMs, but it’s mostly the AMs. But again, that only applies to the third Friday of the month. Now, next week, actually, important to know next week, three weeks from next week’s trade is June nineteenth. The market is closed for the Juneteenth holiday.

So that trade will actually expire June eighteenth and it will still be either an AM or PM trade. So if we choose the AM trade next week, it will expire on Thursday morning, not Friday morning, Thursday morning.

And if we choose the PM, it’ll be Thursday afternoon. So if we do that and we’ll go over this next week for sure. But if we do that, if we choose the AM for next week’s trade, new trade, then the last chance to trade it would be Wednesday the seventeenth. But again, we’ll discuss that more next week when we make our decision. But do keep in mind that the market will be closed June nineteenth. So our expiration for next week’s trade will be June eighteenth.

A lot of people getting filled at two forty, two thirty seven.

Let’s see.

Somebody asked if it feels slower if you’re only trading one contract. It shouldn’t.

It shouldn’t at all. Why is the most volume important?

So anytime you’re trading anything, whether it’s stocks, options, the more volume means the better chance that you’re going to get filled at the price that you want, that there’s just more action, the spreads may be tighter. So for example, if you’re trading a stock like Nvidia versus a stock that trades ten thousand shares a day, if you’ve ever seen stocks that trade ten thousand shares a day, very often the spread is very wide. You may have a stock, let’s say it’s trading at seventy five dollars The bid may be at seventy five dollars The ask may be seventy six point five zero dollars because nobody’s trading it. When it’s, you know, a stock trading millions of shares a day, even if it’s a high priced stock, it might be, you know, stock trading two hundred dollars on the bid and two hundred point two dollars on the ask because there’s so much action, so many buys and sells out there that the spread ends up being very narrow.

So, the more volume and the more open interest and options, the better chance that we’re going to get a fair price, that those spreads will be a little tighter and better chance of getting filled.

So, that’s why we always want to see more volume rather than less. When very little volume, it could be a little bit harder to get filled. Now, the fact that we’re trading, you know, Russell Index options rather than, let’s say, some small stock that doesn’t have a lot of activity, it’s generally not too difficult to get filled on our order. Sometimes we’ll have to move the price down a little bit.

But usually we’re getting filled fairly quickly. But again, just having that volume, having that open interest just makes it that much easier. The last thing you want to do when you’re getting into a trade and especially if you’re getting out of a trade is getting stuck and nobody’s filling your order. So it’s as much to make sure that we can get out easily as opposed to getting in.

I’m fairly confident that even with lower volume, lower open interest, we can get in pretty quickly or easily. But if we ever need to get out and that volume or open interest isn’t there, and the market makers can kind of smell that desperation, they’re going to stick to their prices and try to make you pay up big for it. So, I want to have that volume and open interest to give us the best chance of a fair price.

See.

Don E. V, why is the official track record win loss for all trades not posted on your website?

We don’t do that for any our services as far as I know. I mean, I’ll tell you what it is right now.

So since we started on May sixteenth of last year, we have closed fifty one positions. Forty of them have been wins.

Seventy eight point four percent are winners.

The average position has returned six point seven percent, that’s over three weeks, not annually, over three weeks, while the average S and P return during that time is at one point five percent. But yeah, our company policy, we’ve never posted, you know, all the track records. Also with the amount of trades that we do with all of the different services, there would be just so much information and it would get to be a mess.

David from SLC Utah. How do you calculate your annualized return rate of return on a trade? So the way that we calculate the returns is how much is at risk and how much did you make. So, for example, last week or the trade that we closed out this week, the trade, I believe the premium we collected was a dollar ninety six or one hundred and ninety six dollars.

Therefore, the maximum we could lose on one contract was eight hundred and eight hundred and four dollars because if we took the maximum loss, dollars one thousand would come out of our account, but we’ve already made one hundred and ninety six dollars so eight zero four dollars would be the maximum loss. So our maximum risk is eight zero four dollars Instead, sold out the position early for zero five zero dollars So our gain, we collected one hundred and forty six dollars That was our gain. So if you do one hundred and forty six divided by eight zero four, that’s an eighteen percent return.

So now that’s eighteen percent on the trade itself, right? We risked eight zero four and we made eighteen percent on that eight zero four dollars Then you would have to annualize that. So to make the math simple, let’s say that was the full three weeks, we didn’t cut that short.

I’m going to make the math a little bit easier. It’s not going to be exact. But you three weeks, three times seventeen is fifty one. So fifty one is close to fifty two weeks. So if you annualized that number, you would multiply, let’s say eighteen by seventeen, that would be your annualized return. Now, again, that was on this one trade.

What I’m saying is that we have averaged six percent, a little over six percent every three weeks. So if you annualize that, then that comes out to a pretty darn good number for sure. Seventeen times six is going to be over one hundred percent.

So that would be the annualized return on what we’ve done so far.

And that includes the losses, obviously. So that’s how you would do it. And again, you can make the math much more precise by taking the exact number of days that you’re in the trade or the average number of days that you’ve been in all the trades, dividing that by three sixty five. And that would give you the multiplier to multiply your returns by to annualize it. But we generally don’t report annualized returns because they can also be misleading. I mean, yes, eighteen percent was a nice number.

And if we annualize that, that’s going be a gigantic number, but there’s going to be losses too. So that’s why we just report the real returns and compare it to the S and P five hundred. So we also know what you’d make if you had just, you know, stuck it in an index fund.

Sliv Nergu says I’m averaging fifty four percent on deposits. Awesome.

Let’s see.

So Richard asked, what level do I need for a spread trade? So it depends on your broker. On Schwab, it is level three. On other brokers, it’s level two. It’s actually the same, but they just call them different things.

So, I’m sorry, the other way around. Schwab because Schwab has a level zero. So, Schwab, it’s level two. Other brokers, it’s level three. So, that’s what you typically need.

Karim was saying good things about me the other day when we were looking at real estate. That’s nice to hear. That’s pretty rare.

Because he doesn’t say it to my face, that’s for sure. Now, Karim is a very good friend of mine, and he’s actually the reason I’m with the Oxford Club. He brought me into the Oxford Club in two thousand and seven. He hired me.

But yeah, thank you for letting me know.

What else do we have?

Frank C. Hate the market makers.

I’m laughing because when I got my start in this business as an assistant on the trading desk, the traders would just yell and scream at the market makers just the most vulgar things coming out of their mouths about the market makers. Had one guy, this is when you could call the floor of the exchange and speak to the specialist. And he would call and say, you guys are bleeping me and just scream at them. So I have a similar feeling about market makers as well.

But, you know, they need to earn a living too.

Let’s see.

Karim should have stayed with the OC. He’s doing a pretty good job at Monument Traders. I think he’s pretty happy. They do a nice job over there.

Let’s see what else.

So Sandy B has an interesting thing, says if you’re losing money, don’t let it go to expiration, close it out or they’ll work you over. The market makers play games. So that’s interesting. So if you let it go to expiration, if you’re down and you do let it go to expiration and it stays down, then you could suffer the maximum loss for sure.

But the question is, do we think that there’s a chance it’s going to go back up? Are down a little bit and we think that the market could continue to rise, could bounce? There have been plenty of times where both have happened, where we’ve been down and I held steady, took the maximum loss. Other times where the market bounced, we got our money back or we took a smaller loss. So, you know, every situation is going to be different.

And there are going to be times also where it doesn’t make sense to take the loss because you’re already at the maximum loss or very close to it. Let’s say the market has gone way against us. Let’s say so the trade we put on today, the twenty seven seventies, twenty seven eighties, let’s say the market tanks and it’s now at two thousand seven hundred.

At that point, and we have a week to go, at that point, we’re probably facing a maximum loss situation, even if we close it out early or it’s going to be very close to it. So there’s just no reason, you know, I mean, yeah, maybe you could save, you know, ten dollars twenty dollars thirty dollars But at that point, to me, it’s worth holding on to and seeing if things can change because, you know, you really only need a few percentage points rally depending on where the market is, obviously. But, you know, for two thousand seven hundred, we need, let’s say, roughly three percent a three percent bounce to we’re back at the money.

A three percent bounce in a week is not unheard of. You know, you get one percent one day, let’s say you retract half a percent the next day and next day is a big day and you have two percent. You know, these things can happen fairly quickly, especially when, you know, markets really rally and catch a bid. I’m not talking about when we’re on a slow grind higher.

But sometimes, especially after a hard market fall, the bounce, even if we don’t bounce all the way back to where we were, you know, these bounces during bear markets, during corrections, during setbacks can be pretty violent. So sometimes it is worth hanging on to and seeing if we can get back to being at the money and out of the money and getting our money back. But again, every situation is going to be different. And I certainly let you know what I’m thinking that we should do, whether close out the loss early, take the smaller loss or try to hold on longer.

I did see somebody saying that they can’t get the June twelfth. If you’re on Schwab, make sure you’ve changed RUT to RUTW in the dropdown menu. If you’re on a different broker, maybe someone else can help you if you let them know. But to get that June twelfth expiration, you need RUTW.

Let’s see. Can we try to get one more?

What do you think about getting out if there’s a fifty percent loss? Again, it depends. Every situation is going to be different.

So would put it this way. I would never put in a stop loss like an automatic for down fifty percent. We’re out because basically if the market falls even just a little bit and volatility increases, then the options increase in value. So the options may not be in the money yet.

They may not even be at the money. They may probably be getting closer to it. But because the volatility has increased, the price of your options have increased. And so you may be at that fifty percent level pretty quick, even without a dramatic move in the market.

Because remember, to close a position early, we’re buying option. We’re buying the position back. So the more expensive it is, the worse. So when the markets do fall, volatility increases and those options get more expensive, not just because the price moved against us, but also because volatility has moved against us. So that fifty percent number could get hit very, very quickly if the market drops. What we want is time to be on our side so that as time goes on, the options start to decay because time is an important factor in option pricing.

So that’s going to be an important factor as well.

So if the market bounces, then not only does the price go in our direction, but then volatility typically decreases also, which will slice some juice off of the option price. So that will be in our favor. So I would never put in a stop on a price, whether it’s a hard stop or mental. I would never do that and say, well, if we get to fifty percent, we’re out.

The way I would approach every position is what’s the most I can afford to lose? Assume that any position that you trade is going to have the maximum loss. Okay, that should be your assumption for the loss. Now, we’re going do our best to manage that and make sure that that doesn’t happen.

But it’s going to happen sometimes. So always have that assumption. So if your maximum loss, let’s say, is eight hundred dollars in any one position, then only trade one contract. If you can afford, you know, you’re willing to risk four thousand dollars then you can trade five contracts, you know, whatever that is going to be for you.

But don’t say, you know, I can only afford to lose eight hundred dollars but I’m going to buy two contracts and then a fifty percent stop. I’m going get out fifty percent. That’s not going to work. You’re going to get stopped out.

Very often, these positions will move against us just because volatility will increase a little bit and option prices increase. So, really important. Always think about the maximum loss is the assumption for the loss. And that’s how you position size as opposed to I’m going to take a smaller loss in order to manage the risk.

It just doesn’t work that way with options. And that’s true here. Or whether you’re speculating, you know, whether you like one of the stocks that I or Alex or Mark Skousen recommended and you’re going to buy a speculative call on it, same thing. What’s the most you can afford to lose if this doesn’t work out, if that option goes to zero and position size accordingly? Don’t think that you’re going to get out with a fifty percent loss because it’s often very, very difficult to do that as well.

So with that said, I’m going to leave it here. Go enjoy the long weekend. Congratulations on depositing another winner in your account. And I will see you next Friday. Have a great weekend, everyone.