The utilities sector has been schmeissed (technical term) over the past couple of months. Its like all of a sudden investors all woke up en masse to finally decide the rising interest rates environment offers better alternatives for their investing dollars than relatively riskier dividend paying stocks.

This may be true, but is it possible investors may have overreacted a bit?

On a sector level, the Utilities ETF $XLU has potentially put in a tradeable bottom -- at least one we can lean against for risk management purposes. And considering their is upcoming earnings announcement risk in many of the biggest names in this sector, playing the ETF feels like the safest way to play.

Costco earns its margins before you even whip out your credit card at the checkout counter.

How?

They get paid upfront, selling you an annual "membership" that allows you to shop at Costco. That membership is all margin for Costco. This is how they can afford to sell most of their goods at or just above cost, yet still earn steady, reliable profits. What a concept!

We're gonna steal that concept by getting paid upfront.

Depending on who you ask, people might agree that consumers are feeling the pinch of inflation. The sentiment that I encounter on a nearly daily basis is: "I can't believe how much _____ costs now. It's insane!"

If we look at a daily chart of the consumer discretionary stocks ETF $XLY, we might draw a conclusion that consumers are beginning to feel tapped out, as the upward momentum in early 2023 seems to have run out of steam.

With elevated options premiums in $XLY, this sets up a nice options premium collection play.

Yesterday's trading action in $TLT, the 20-year treasury bond ETF, gives me confidence that it might have been a near-term low.

I'm making the bet that it'll hold for at least a few weeks. And the elevated options premiums here give us ample ammunition to wait it out.

After slowly dipping my toes last week into the idea that it might be time to start getting into some new long exposure, the market's reaction to the latest Federal Reserve action tells me the direction is still sideways until further notice.

So we're literally betting on that today with a delta-neutral credit spread in the Russell 2000.

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P.S. We do trades like this regularly. If you'd like to leverage Best-in-Class technical analysis into smarter directional options trades, try out All Star Options Risk Free! Or give us a call to learn more: 323-421-7991.

The post-fed interest rates decision hangover this week has thrown stocks back into the sideways slop zone. Therefore, until conditions change, we're going to keep selling premium to ride this out.

Today's trade is a defined risk premium collection play that gets us out just before earnings.

While the stock market continues to digest its recent run and weave through this sideways consolidation, we're starting to get some pretty clear hints on which stocks will likely be leaders if/when the bull market resumes.

Today's trade is an early bullish bet on one of those names.

The markets are telling us it still wants sideways for longer.

We know this script, and we know it's been working. So we're going to keep chopping this wood until the markets tell us to get more directionally aggressive.

Ok, that's a stupid question but I'm out of pithy headlines.

When the market more or less is only offering you one style of options trade that makes sense in this environment, things might get a bit monotonous around here. And when that happens, my brain offers up 'dad joke'-level headlines :)

But there's nothing boring about making money and our delta-neutral credit spread trades continue to work. So we're continuing with them with today's trade.

The hunt for premium selling opportunities continues. And today's trade is in a name that is heavily weighted in the Home Construction sector ETF, where options premiums -- sector-wide -- are a bit more elevated than the rest.

Thankfully, October options expiration happens the week before this company releases its next quarterly earnings report, so we don't have any of that event risk to worry about.

As I mentioned last week, we're in an environment where we want to be collecting delta-neutral options premium. Unfortunately, we can either pick instruments that are in well-defined ranges or we can sell high implied volatility, but it's getting increasingly hard to find both.

With this in mind, today's trade is in an instrument where options pricing may not be as elevated as it was earlier in the year, but it's still giving us a lot of room to be wrong.

Today's trade was crowdsourced in the All Star Options Telegram chat. Thanks to those of you who brainstormed with me.

As you know, I'm on the hunt for rangebound instruments to sell delta-neutral premiums in. The problem is -- it's getting harder to find charts that check all the boxes. I find myself having to make compromises. I can either find good premiums (often at the risk of an earnings event on the horizon), or I can find a stock in a good range. But it's getting harder to find both.