Ratio Spreads, Covered Calls and More: Managing a Portfolio in a Choppy Market

by | Apr 15, 2025

In a sideways or uncertain market, one of the most important things you can do as a trader is manage your cash flow while reducing directional risk. It’s not about chasing the big breakout or bottom-ticking the perfect reversal — it’s about staying in the game, keeping your buying power flexible and letting time work for you.

Right now, I’m using a blend of ratio spreads, covered calls and put credit spreads to generate income across a range of stocks. The idea isn’t to hit home runs. It’s to keep collecting base hits while the broader market churns through a period of indecision.

How I’m Building Income Positions

Take Apple (AAPL), for example. I’ve been managing a series of ratio spreads and covered calls that allow me to collect premium while keeping a bullish lean. These are trades I’m fine rolling week after week or even month after month. I’m not worried about being assigned — I’m happy to hold shares and continue generating income with calls.

I’ve got similar setups running in Amazon (AMZN), Google (GOOGL), Microsoft (MSFT) and Coinbase (COIN). In each case, I’m staggering expiration dates — some in May, some in June, some going all the way out to December or even January.

This spacing gives me more flexibility to adjust and scale in as prices move.

Ratio spreads are particularly attractive right now because of elevated volatility. I’ll buy one option, sell two farther out of the money and create a little “profit trap” — a sweet spot where the trade pays best if the stock drifts into that zone.

If it doesn’t, that’s fine too. These trades can still deliver strong returns even with modest moves or time decay working in your favor.

Why Time Is My Ally Right Now

This is not a market for max aggression. There’s too much headline risk — tariffs, Fed cuts, earnings guidance — and too many sectors struggling to find leadership.

The best approach I’ve found lately is to keep a steady rhythm: Sell premium, manage deltas, and use longer-dated trades to give the market time to make up its mind.

I’m mostly focused on stocks within the Information Technology (XLK), Financials (XLF) and Communication Services (XLC) sectors. These tend to have decent option liquidity and, in most cases, lower exposure to tariff disruptions.

But even then, I’m not going all in — just building layered trades with well-defined risk and letting the market come to me.

You don’t need to predict the next big move in a choppy tape. You just need to survive it — and if you can collect income while doing it, even better.

I’ll see you in the markets.

Chris Pulver
Chris Pulver Trading

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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 

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