Why I’m Passing on Trades — and What I’m Doing Instead

by Chris Pulver | Jul 7, 2026

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It’s the calm before the storm with big earnings resume and inflation data on deck, FOMC minutes on Wednesday, no news is good news for now with positive vs. negative gamma and more — but volatility is coming [tap to join us for the Daily Profit Plan]!

When expected moves compress below 40 points like they did Monday, conservative premium collection becomes nearly impossible

Let me walk you through something that happens more often than most traders realize — and it happened yesterday morning as I prepared for Daily Profit Plan.

I sat down, ran through all my usual calculations, and came to a pretty unsatisfying conclusion: Current market conditions just don’t support the kind of trades I like to make.

Here’s what I’m dealing with. The VIX is sitting around 16, and when I calculated the expected move for the S&P 500 (SPX) using multiple sources, I’m looking at a compressed range. One showed me a 36.09-point move for the end of the day and 26.97 premarket. The smart range feature came in at 38.79 points. My broker platform showed 42.24 points.

I always take the highest number for maximum safety margin, so I’m working with that 42.24‑point expected move. But here’s the problem — when your expected move is only 25 to 30 points, trying to sell conservative out‑of‑the‑money (OTM) premiums becomes almost impossible to execute profitably.

This isn’t the first time we’ve been boxed into a tight range like this. We’ve had stretches of three to four months where the market simply chopped back and forth without offering clean directional follow‑through, and these low‑volatility environments tend to compress opportunities the same way we’re seeing now.

On top of that, the broader market picture isn’t offering much help. Around 67% of S&P 500 stocks are trading above their 50‑day moving average, which signals underlying strength but also explains why the index isn’t offering much fear premium.

When the market is this firm under the surface, volatility dries up — and so do the credits.

The Premium Problem That Changes Everything

Let me show you exactly what I mean. I was looking to sell bear call spreads around 7,575 to 7,600 — roughly 70 points above where SPX was trading. That should be a relatively safe distance in normal conditions.

But when I priced out a 20‑wide spread at those strikes, I was only getting 60 cents in credit. That’s completely inadequate for the risk I’d be taking on.

So I adjusted. I moved to 5‑delta strikes and went wider — 25 points wide for just a dollar in credit. Still not good enough. Because here’s what happens with those thin premiums: If I have to play any defense on that trade due to an outlier move, I’m probably only making 60 to 70 bucks on the day.

To give you a sense of the type of setup I would normally consider, I took a look at the S&P 500 mini (XSP) as well. With a typical 20‑point move expected there, it’s the kind of product I’d use if the volatility backdrop were more cooperative. But even that wasn’t offering enough edge to justify getting involved unless price came to me.

That’s just not a worthwhile risk‑reward scenario when you factor in the capital commitment and the possibility of having to manage the position.

When Discipline Means Waiting Instead of Forcing

This remains my least favorite trading environment, and I’ve been pretty vocal about that over the nearly two years of running the Daily Profit Plan. When the plus‑minus on the day compresses to this level, the math just doesn’t work for the kind of conservative, OTM premium collection I prefer.

So here’s what I did: I set pending orders at $2 credit for 20‑wide spreads and decided to let price come to me. Rather than accept suboptimal fills just to get something on, I’m letting the market decide whether it wants to meet my terms.

Maybe those orders fill, maybe they don’t. And you know what? That’s perfectly fine. Not every market environment supports every strategy, and recognizing that reality is part of risk management.

The discipline isn’t always in executing the perfect trade — sometimes it’s in having the patience to wait for market conditions that actually support your approach. When premiums don’t justify the risk, the best trade might be no trade at all.

I’ll see you in the markets.

Chris Pulver
Chris Pulver Trading

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