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Markets get wild sometimes. When they do, most traders either freeze up or throw caution to the wind.
I do neither.
Instead, I build structured trades that provide more breathing room than the market is pricing in — and I demand enough premium to make the risk worthwhile.
That matters when the market is vulnerable to cascading events. One catalyst can trigger another, turning an ordinary move into something much larger.
When that possibility is elevated, I don’t try to predict every step. I structure the trade so I can withstand more than the options market expects.
When SPX pulled back toward 7,316, I broke down an iron condor setup on the S&P 500 Index (SPX) that offered about 50% more room than the market makers expected while targeting roughly a 30% return.
Demanding Your Price
With SPX trading around 7,316, the market maker expected move was roughly 71 points. That’s how far the options market suggested the index “should” move by expiration.
But I wanted a much bigger cushion.
Chris Pulver’s Pinch Point Scanner suggested the market was in a late-stage compression. When a market gets pinched like that, the eventual release can be sharp.
That reinforced my decision to place the risk well outside the expected move rather than squeezing out a little more premium closer to the action.
I looked at strikes around 7,425 to 7,450 on the upside, seeking premium while staying well beyond the expected move. That gave me about 25 to 35 extra points of room.
I originally wanted $1.80 in premium but could only get $1.50. That difference matters. An extra $0.30 can improve the risk-reward by another 15% to 20%.
So I didn’t chase it. I set my limit and moved on. You might miss half your entries by demanding your price, but that’s acceptable when you’re holding out for a return that makes sense.
Why This Trade Fit the Overall Portfolio
I already had an SPX hedge at 7,350. If the market gapped down and moved sharply lower, I might lose a little on the condor but benefit from the hedge. If the market rallied higher, my portfolio would be up anyway.
This trade wasn’t happening in a vacuum. It was part of a larger portfolio structure. If conditions turned ugly for several sessions, the hedge could help offset some of that pain — financially and emotionally — while the condor retained plenty of room.
When structured alongside the broader portfolio, the directional risk was covered, the setup provided ample room and the potential risk-defined return was solid.
That’s the beauty of building trades with context. You’re not reacting to one chart or one setup — you’re considering how everything fits together.
When the market gets pinched, structure your trade with more room than it expects, demand a sensible premium and make sure the position fits your overall portfolio.
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Nate Tucci
Tucci Trades
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
