Live Options Trades | Bull vs Bear Strategy Breakdown

Bull vs. Bear: Real Live Trades - February 25th, 2026

Key Concepts:

• USO: ETF tracking the price of crude oil.
• SoFi: Financial technology company with exposure to digital assets and cryptocurrency.
• Walmart (WMT): Retail corporation, potential short opportunity based on market cycle.
• JP Morgan (JPM): Large bank, bearish outlook due to concerns about the private credit market.
• IV Rank (Implied Volatility Rank): Measures the relative expensiveness of options, indicating potential reward for selling options.
• Theta: Measures the rate of time decay of an option's value. Positive theta indicates earning money as time passes.
• Vertical Spread: An options strategy involving buying and selling options of the same type (calls or puts) with different strike prices but the same expiration date.
• Probability of Profit: The likelihood that an options trade will be profitable at expiration.
• Buying Power Effect: The amount of capital required to enter an options trade.
• Debit Spread: An options strategy where the net cost of the trade is a debit (money paid out).
• Credit Spread: An options strategy where the net result of the trade is a credit (money received).

Bullish Trades

1. USO (United States Oil Fund)

The trader initiated a bullish trade on USO, the ETF tracking oil prices, citing a rally in oil and gasoline prices since the beginning of 2026. This rally is attributed to reduced crude oil inventory numbers and geopolitical tensions in oil-producing and demanding regions like China, Iran, and Venezuela. Furthermore, the significant capital expenditure (capex) in the AI sector – by companies like Google, Amazon, and Meta – is expected to drive energy demand, including fossil fuels, potentially supporting USO’s price.

The trader focused on options with a 70% IV Rank, indicating relatively high volatility and potential reward for selling options. A put vertical spread was implemented: selling a 75 put and buying a 73 put with a 36-day expiration. This yielded a credit of 63 cents, targeting approximately one-third of the strike width ($2). The trade was selected based on a 76% probability of being out of the money at expiration, a projected profit of $32 before expiration, and a positive theta of $110. The order was routed and submitted aiming for a 65-cent credit.

2. SoFi (Social Finance)

A bullish trade was established on SoFi, a financial technology company, despite recent declines linked to the performance of Bitcoin and other cryptocurrencies. The rationale is that if Bitcoin and other crypto assets have found a floor, SoFi, as a company with exposure to these assets, could benefit. The relatively low stock price ($19) allows for position sizing even with smaller accounts.

The trader identified tight bid-ask spreads in SoFi’s options. A put vertical spread was constructed using the March expiration: selling the 17.5 put and buying the 17 put. This generated a credit, with a 68% probability of expiring out of the money. The trade offered an 81% probability of capturing half its maximum profit ($28) before expiration, with a buying power requirement of $218 and a maximum loss of $1,700. The trader highlighted a positive theta of 82% and a decent return on capital. The order was reviewed and submitted, and a fill was confirmed.

Bearish Trades

1. Walmart (WMT)

The trader initiated a bearish trade on Walmart, anticipating a potential pullback after a recent run-up in the retail sector. The assumption is that the rally may be unsustainable and could reverse, especially if the broader market weakens.

A call vertical spread was implemented: selling the 130 call and buying the 132 call. This yielded a credit of 61 cents, targeting one-third of the strike width ($2). The trade was selected based on a 74% probability of making half its maximum profit, a maximum loss of $139, and a positive theta of 95 cents per day. The order was submitted and filled.

2. JP Morgan (JPM)

A bearish outlook on JP Morgan was presented, driven by concerns about the private credit market. The trader believes potential issues with private loans, particularly those held by banks like JP Morgan, could negatively impact the stock.

A long put spread (debit spread) was established using the March expiration: buying the 305 put and selling the 300 put. This required a debit of $2.60. The trade was based on a 61% probability of making half its maximum profit, a maximum profit of $240, a maximum loss of $260, and a positive theta of 65 cents. The order was routed and filled.

Methodologies & Frameworks

The trader consistently employs a specific methodology when selecting options trades:

1. Volatility Assessment: Prioritizes options with a high IV Rank (ideally above 70%) to maximize potential reward from selling options.
2. Spread Construction: Favors vertical spreads to limit risk and define potential profit.
3. Probability & Theta Analysis: Focuses on trades with a high probability of profit (generally above 65-70%) and positive theta to benefit from time decay.
4. Target Credit/Debit: Aims for a credit representing approximately one-third of the strike width in credit spreads.
5. Risk/Reward Evaluation: Considers the maximum potential profit and loss, as well as the buying power effect, to assess the trade’s risk-reward profile.

Notable Quotes

• “Get these things on your side [probability, theta]. Those are the metrics that I think are important.” – Emphasizing the importance of statistical advantages in options trading.
• “Remember, these are not trade recommendations. Trade these symbols at your own risk.” – A standard disclaimer highlighting the inherent risks of trading.

Synthesis/Conclusion

The trader demonstrated a systematic approach to options trading, focusing on identifying opportunities based on market conditions, volatility, and statistical probabilities. The trades spanned both bullish and bearish perspectives, utilizing vertical spreads to manage risk and capitalize on anticipated price movements. The emphasis on positive theta and high probability of profit underscores a strategy geared towards consistent, albeit potentially smaller, gains rather than high-risk, high-reward speculation. The trader consistently stresses the importance of understanding the metrics involved and trading responsibly.