Friday Bloody Friday

It’s no great secret that the DOW tumbled by over 750 points today
So much for the over hyped All Time Highs…

My apologies in advance, this is not a victory lap, it’s not, I promise you that
This is a reminder that we here at theoptionscoach.net have been saying and continue to say that “2025 is not going to be like 2024” And also that::
“Stocks will drop harder and faster in 2025”
Not to mention that it’s still a stock pickers market. Maybe more so now than before

AMZN, META and WMT all got taken to the wood shed today, and the selling may not be over yet
I’ve been saying for a few days that the shorts wanted $685.00 in META
They got it, if META continues south the next target is $647.00, below that is $630.00

Today was OPEX or Options Expiration for Monthly Options
What the Market Makers got today isn’t normal, they “got a free piece of pie”
How you ask? With WMT coming out yesterday and saying how the impending tariffs will slow revenue, stocks fell hard yesterday
Then piggy back that into todays OPEX where it becomes a “Theta Burn” premiums didn’t simply erode, they collapsed

As every investor of all skill levels and experience knows, the #1 single thing that Wall Street does not like the most is “Uncertainty” And right now the uncertainty around the tariffs is allowing Market Makers to have their lunch and free piece of pie bought by retail investors

There’s an “old skool” Options play known as “Straddles”
Typically they are used for earnings or big announcement events
Straddles work by buying a Call and a Put both at the same strike price for the same EXP
The way they work is they need a BIGGG movement to offset the price of the side they went against

So if our stock XYZ is trading for $100.00
We might pay $5.00 for the Call
And $5.00 for the Put
Both at the $100.00 and both on the same EXP
Now our Straddle cost us $10.00
Either way, up or down, does not matter, we only want BIGGGG movement in one direction or the other

We are seeing signs of a continued break down, but if the markets does do a U -Turn and goes north, Straddles could see enough movement to make them worth our time without the headache of trying to figure a direction

This Sunday nights Weekly Recap will most likely talk about them in more depth
I’m going to dive deeper into the best looking plays this weekend
The weekend is here and “Polar Vortex 2025” is winding down
The Sun is out and things are warming up, hopefully they are where you are too
Go get outside in nature this weekend, you won’t regret it

The Options Coach