Markets are closed today — the short week ahead, and what "in the money" actually means

Markets are closed today

U.S. markets are shut for Labor Day. Nothing prices, nothing expires, nothing decays on a screen you can act on — the next session is Tuesday.

To everyone marking the day: enjoy it. And to the many of you reading this somewhere it is an ordinary Monday — the U.S. closure still shapes your week, because it is where these positions trade. Either way, this one is shorter than usual, with no session to recap and no prices to chase.

Where things stood on Friday

The last session was Friday, September 4. Three of the four major indexes finished lower: the S&P 500 at 7,718.60 (-0.38%), the Dow at 53,414.25 (-0.51%) and the Nasdaq Composite at 26,506.99 (-0.29%), with the Russell 2000 the exception at 2,975.65 (+0.25%).

VIX closed at 14.53, up 1.47% on the session and essentially flat week-over-week. Its ratio to three-month volatility sits at 0.825 — contango, the ordinary shape, where near-dated fear is priced below far-dated. The 10-year Treasury finished at 4.78%, up 2.2 basis points.

A VIX of 14.53 sits in the Greed band, where the deployment model targets 40–50% of capital at work. Low volatility means thin option premium. That is not a verdict on anything — it is simply what the market is paying right now, and it is the reason a patient week is a reasonable week.

When "in the money" is not a loss

Three positions across the Opty books are sitting in the money this morning: $PCG shares against a $16.20 breakeven with the stock at $14.30, $CCL shares against $24.64 with the stock at $23.51, and a $CRDO put struck at $200 with the stock at $170.57.

For a lot of newer wheel traders, that screen is the scariest one there is. So it is worth being precise about what it means.

A short put going in the money is an assignment risk, not automatically a loss. Those are two different things, and conflating them is what makes people close good trades at bad prices.

• The strike is where shares get put to you. It is not your cost.
• Your breakeven is the strike minus every dollar of premium collected on

that name. $CRDO's put is struck at $200, but its breakeven is $187.70 — the premium moved it $12.30.

• A position is only underwater at expiry if the stock finishes below the

breakeven, not below the strike. Between those two prices, assignment happens and the trade is still ahead.

Which is why the wheel has a second half. Assignment is not the trade failing; it is the trade doing the thing it was structured to do — buying shares at a price you named, at a discount to that price by the premium you were paid. The question that follows is not "how bad is this" but "is this a business worth owning while the position repairs".

Where it genuinely hurts is when the answer to that question is no. That is a decision about the company, made before the put was ever sold — not a decision about the red number on the screen today.

The week ahead: short, and back-loaded

Tuesday's open starts a four-day week, and the calendar puts the weight at the end of it.

• Weeklies are short-dated this week. A put sold Tuesday for Friday expiry

is roughly a four-day trade, not five. Less time means less premium, and that is expected rather than a signal about the stock. Premium that looks thin on a short week is usually just a short week.

• Three days of decay already happened. Friday to Tuesday is three

calendar days of theta on every open contract, with no session in between to act on it. That works for the seller and is worth remembering before reading Tuesday's marks as a move.

• CPI lands Friday morning at 8:30 ET, before the open — the same session

weeklies expire. A contract sold Tuesday carries its last day through an inflation print. Not a reason to avoid the week; a reason to know what is being held through it. (Bureau of Labor Statistics release schedule.)

• PPI is Thursday, also 8:30 ET, also before the open.
• The Fed meets the following week, September 15–16, with the decision

Wednesday afternoon. Anything opened now at 30–45 days spans it. The Fed's quiet period began Saturday, so official commentary goes silent until then.

On the screener, the names clearing the quality filters with the richest relative volatility are $CCL (IV 44%, IV Rank 51), $FCX (IV 48%, IV Rank 51), $LUV (IV 40%, IV Rank 43), $UBER (IV 37%, IV Rank 42) and $DVN (IV 34%, IV Rank 41). Strike levels and premiums reprice at Tuesday's open — Friday's marks are the last real prints, and by Tuesday morning they are three days old.

This week's video

If it is useful, a like, a subscribe and a comment genuinely help more than they look like they should — they are what puts the next one in front of someone else learning the wheel. Questions in the comments get answered.

Back Tuesday

Normal service resumes with Tuesday's session and Wednesday morning's brief. Enjoy the day off, wherever you are and whatever it is called there.