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.

While in the process of preparing for this week’s live Options Jam Session, I came across an open trade in $HMC that has been performing quite well for us.

It reminded me that when I wrote about the trade back on May 15th for subscribers, I began the piece with this:

I’m filing today’s trade under the category of “Hard Trades.” Not because it’s particularly hard to execute or because it’s a complicated multi-legged spread. It won’t require an excessive amount of margin to get positioned nor is there any risk of unlimited losses.

It’s hard because people might look at the trading action of the past few days and think that it’s “gone too far” and “I should wait for a pullback.”

And traders who think that way may be right.

But here’s the thing: sometimes the best trades to get into are the best precisely because they are the “hardest” to pull the trigger on. And that’s where our opportunity is. Those of us who fight through the conventional wisdom of average traders and get positioned ahead of the crowd will be lifted later on by those same traders...

He had it coming.

But this isn't really about Philip and his cancer sticks.

Instead, I'm going to sell premium in his Philip Morris stock options, betting on the company going nowhere for at least the next month.

First up, look at this chart:

We can clearly see the range contracting all year in $PM. Given what the broader stock market is doing, my bet is this range contraction continues.

Now the wrinkle we have to deal with is that Philip Morris is slated to release their next quarterly earnings statement on October 19, which is ONE DAY before October monthly options expire! That makes it tricky to be selling premium in the regular monthly options.

But the good news is, we can select the October 13 WEEKLY expiration options to express our trade.

Here's the Play:

[10/19/23 Update: moved stop to 125]

We're adding another bullish leg to an existing position we already have on the books in Google.

In early May, we purchased December 120 calls that have performed nicely for us. In fact, we already sold half of our position and are #FreeRiding on the remaining portion of that initial trade. We can't lose!

Given the price action and relative strength we've seen in $GOOG this summer, we're ready to put on another fresh position to take advantage of even more upside.

Check out this chart:

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.

At the risk of sounding like a broken record, I'm continuing my theme of the past week of looking for opportunities to sell premium in mostly delta-neutral options trades.

"Delta-neutral" basically means I'm looking to collect income in sideways consolidations while the broader markets sort out this current correction.

Not only is this a good tactical bet for sideways, sloppy, and messy markets, but it also provides nice portfolio diversification if you have a book of long positions like I do.

We've got a well-known mega-cap stock to use as our vehicle today, so let's get to it.

The longer I’ve been in this business of trading, the more I’ve come to realize that “get better at smarter trading” is not the answer to the question: “How do I make more money as a Trader?”

Yes, we can all be better at regime detection, trade selection, strategy selection, optimal position sizing, risk management, and profits management. There will never not be room for improvement in these realms.

However, to me, the real answer lies somewhere off the charts. Away from the screens. Outside of our office or wherever we get work done.

The answer is located someplace closer to where we unwind. Where we exercise. Where we meditate. Where we reconnect with the important people and places in our lives. Where we rejuvenate our souls.

It’s becoming all too clear to me that one of the keys to optimal performance is to make sure our bodies and minds are right. And that ain’t gonna happen while hunched over a computer screen or mobile device.

The key to optimal performance is

This trade doesn't need a long-winded send-up. Because it's the same story as the trade we put on in $FCX on Friday.

So let's get right to it.

Here's the trade: