JD’s found a way to turn Wall Street’s overconfidence into cash
Hello, JD here with your Rational Trader Market Analysis.
I should probably change the name to the Cash Machine Daily — because that’s been the dominant focus lately, and for good reason.
These trades have been working. Period.
They’re small, reliable, and consistent. We’re not swinging for home runs. We’re hitting singles. Dollar after dollar after dollar into the account.
Helping a Friend — and Showing the System Works
Behind the scenes, I’ve been trading this strategy with a dear friend of mine — a former graduate school buddy who now has a 6-figure options account. Together, we’ve been placing these same trades I talk about here (and more) with the goal of doubling his account over time.
And we’re doing it the boring way: with high-odds mean reversion setups and calculated volatility trades.
Why I’m Not Playing Earnings the Usual Way
Yes, it’s earnings season. And yes, option premiums can get very juicy right now. But that’s not what I’m chasing.
Instead, I’m focusing on exploiting the irrational pricing that earnings season creates — without trying to guess the direction of a stock move.
One of the best examples today? A volatility setup on Talen Energy (TLN).
The Talen Energy Setup
Here’s the play we made:
- Buy the $380 call
- Buy the $380 put
- Sell the $400 call
- Sell the $360 put
- All expiring this Friday
This is a long straddle with a short strangle over the top — creating a trade that costs about $1,200 to enter and has a max payout of $2,000, meaning $800 potential profit.
What do I need to win?
- A 4.7% move up, or
- A 5.7% move down
That’s it. Doesn’t matter which direction. With this kind of trade, I just need a move.
And since the implied move on TLN is around 13%, I feel very comfortable with this setup. The math is in our favor.
Disney: A Real-World Reversion Example
We had a similar story play out with Disney (DIS).
On that trade, we sold a put, and bought another put even further below. The market tried to shake us out — and briefly took away our spread — but then the stock recovered.
I ended up closing the trade by placing a limit order to buy back the short option at $1.60. As of this writing, Disney has pushed up past $115 — meaning the trade is working out even better than if I had closed it.
This wasn’t a directional bet. It was just another clean reversion-to-the-mean setup that we structured to take advantage of volatility, not predict it.
Want More Trades Like This?
I’m doing 5 or 6 of these trades a day right now. I’ll start sharing more if you want them.
Let me know — drop a comment in YouTube, email [email protected], or join my free Telegram channel and send fire emojis.
The more I hear from you, the more trades I’ll break down.
That’s it for today. Let’s keep stacking singles.
Talk soon,
JD
The Rational Trader
