If You Sell Options, You Need This Moving Average Filter

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------------------------------------------------------------------------- This communication/content is for informational purposes only and is not intended as personalized investment advice, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This communication should not be relied upon for purposes of transacting in securities or other investment vehicles. Trading options carries a high degree of risk and may not be appropriate for all investors. Options can lose value rapidly and a position may expire worthless. Some strategies can result in losses greater than your original investment. Past performance is not indicative of future results. This video is for educational purposes only and should not be construed as financial, investment, tax, or legal advice. Consult your personal financial advisor or other qualified professional before making any investment decisions. Do not trade with capital you cannot afford to lose. ------------------------------------------------------------------------ ➡️Join Income Academy Today! ⬅️ https://www.skool.com/incomeacademy/about?ref=0d308079b0eb420ca5b012e8ccb2c0ab ------------------------------------------------------------------------ Moving-average entry filters make options selling easier for one core reason: they turn “Should I sell premium now?” into a repeatable, rule-based decision tied to market regime. That reduces bad-timing trades, simplifies strike/tenor selection, and improves consistency. 1) They solve the hardest part: timing and regime Most premium sellers struggle less with the strategy (CSPs, put spreads, covered calls) and more with when to deploy it. A moving average (MA) filter is a crude but effective proxy for regime: Price above an MA (often a longer one) = trend/pressure generally favorable for bullish premium strategies (CSPs, put spreads). Price below an MA = trend/pressure generally unfavorable for bullish premium strategies; you either reduce size, change structure, or wait. That alone removes a huge amount of “I feel like it’s safe” discretion. 2) They reduce left-tail risk by keeping you out of the worst environments The biggest drawdowns for option sellers usually come from selling bullish premium into persistent downtrends (multiple red weeks, volatility expansion, correlations rising). MA filters help because: Downtrends often persist; being early is expensive for sellers. Staying out during “below MA” regimes can reduce the frequency of being short puts during high momentum selloffs. You typically trade fewer days, but the trades you do take are more aligned with the tape. In practice: even a “dumb” MA rule can outperform “always sell” on a risk-adjusted basis because it avoids clusters of losers. 3) They standardize your checklist and reduce decision fatigue Without a filter you’re constantly interpreting: news, Fed days, CPI, breadth, vibes, headlines. With a filter, your pre-trade checklist becomes binary: “Above MA? Yes → allowed to sell bullish premium.” “Below MA? No → stand down / switch playbook.” That is psychologically powerful because it reduces the urge to “make something happen” in bad tape. 4) They improve consistency across different option strategies One filter can govern multiple income plays: Bullish premium (CSPs / put spreads) Only sell when price MA (or MA slope positive). Optional: use shorter MA for “tactical” and longer MA for “structural.” Covered calls When price MA: you may sell calls farther OTM (let the trend work). When price MA: you may sell calls closer ATM (more defensive) or reduce stock exposure. Call credit spreads / bearish premium Some traders invert the logic: allow bearish premium only when price MA. This creates a coherent playbook: the MA decides your bias and you select the option structure to match. 5) They can improve strike selection and delta targeting A filter does not just answer “trade or not”; it can guide “how aggressive”: Above MA and strong trend: you can often sell higher delta (more premium) with less fear of immediate trend reversal, or keep the same delta but scale size. Barely above / chopping around MA: lower delta, smaller size, or shorter duration. In other words, MAs help you avoid selling rich premium at the exact moment the market is transitioning to a worse regime.