Market Update and SPY Outlook Stephen Cox opened the Q\&A session with a market rundown, noting that SPY was up 1.3% pre-market due to Nvidia's strong earnings, which countered the narrative that the AI trade was ending (00:03:26). Despite the current rise, Stephen Cox would not be surprised if the market tested recent lows in the near term, though they project that SPY will actually go higher by the end of the year, potentially testing or exceeding 7,000, assuming no major negative US economic news emerges (00:05:30) (00:07:20). Stephen Cox also mentioned that Bitcoin's recent 29% correction from its peak, and potential further 10% drop, could cause margin calls leading to selling pressure in stocks and equities (00:06:27).

Micro Strategy and Market Volatility Stephen Cox demonstrated the potential for volatility in the crypto-exposed market by highlighting Micro Strategy, a company that primarily buys Bitcoin, whose share price has dropped 60% in about three or four months since its peak in July. They noted that this volatility might lead to forced selling due to leverage. Stephen Cox reiterated their expectation for the S\&P 500 to move higher by the end of the year but anticipates a near-term shakeout, indicating that only severe negative economic data could change their bullish long-term perspective (00:07:20).

Short Put Trade Analysis Stephen Cox discussed the existing short put position on SPY, noting that its unrealized P\&L was based on yesterday's close and would be significantly profitable today due to the market's upswing. They highlighted the statistical strength of this trade, boasting a 92% probability of profit, which they find makes it "stress-free trading" (00:08:21). Stephen Cox noted that statistically, there is a 10% chance of needing to manage the trade, which they are prepared for (00:09:20).

Ratio Put Spread Strategy and VIX Analysis Regarding the ratio put spread, Stephen Cox explained that the trade involved buying a put at the 660 strike (bearish) and selling twice as many at the 650 strike (bullish bias), established at a credit (00:09:20). The strategy wins if SPY does not fall below the break-even point of 635, which historically had an 87% chance of winning. Stephen Cox explained the importance of the VIX (volatility index) as a "best friend" for options trading, noting that a VIX spike, typically defined as reaching 30-40, is usually a good time to buy the stock market or sell an insurance contract because option premiums increase with volatility (00:11:23).

Managing the Ratio Put Spread and Volatility Stephen Cox considered selling the long 660 put to maximize its value during the recent volatility spike, which would have left them with naked short puts underneath—a strategy for experienced traders (00:13:23). They explained that selling the put option when the VIX is high maximizes the premium received, operating under the belief that the selloff is ending and the market will rally, which is typically what follows a VIX spike (00:16:20). Due to today's market rally, Stephen Cox decided to be patient and wait for a possible retest lower before taking action on the put option (00:13:23).

Discussion on Ratio Put Spread Management S G inquired about Stephen Cox's strategy for managing the 660 put, noting that it was close to the market price (00:14:23). Stephen Cox clarified that the intention was to maximize profit from the 660 put by selling it when the implied volatility (IV) was high, which occurs before a predicted rally, and emphasized their comfort with managing the risk of the naked puts underneath if the market continued to fall (00:16:20). They highlighted that their bullish long-term outlook for the S\&P 500, seasonal factors, and high probability of success (break-even at 637) supported this aggressive management of the long put (00:17:22) (00:19:02).

Long-Term S\&P 500 Outlook and Risk Management Stephen Cox asserted that the S\&P 500 bull market is not over and is built to go up over time, primarily driven by the ongoing AI trade and upcoming technological changes like quantum computing, believing only a US recession would stop it (00:19:02) (00:33:23). They also detailed risk management for the short put strategy, which includes the ability to roll the puts out and down to much lower strikes if necessary, minimizing losses (00:20:21) (00:31:21). Stephen Cox cautioned against anxiety from reading constantly negative media reports, as these are often published by people who have been wrong numerous times, capitalizing only on the one time they are correct (00:34:27).

IG Index Platform for Options Trading (Spread Betting) Stephen Cox demonstrated trading options on the IG Index platform, which is structured as spread betting, useful for traders in Ireland and the UK, and potentially those with smaller accounts, as it simplifies risk and avoids share assignment (00:21:08) (00:23:07). They showed an example of selling a 6200 put with a 92% probability of profit, where the margin is set aside without financing cost (00:22:07). Philip Lambert questioned the exposure, and Stephen Cox explained that the loss is the price of the option multiplied by the multiplier if SPY drops below the strike price at expiry, emphasizing that the principles are the same as traditional options, but structured as a bet (00:24:04).

Managing Trades on IG Index Stephen Cox addressed the management of positions on the IG Index, confirming that trades can be rolled out and down, similar to traditional brokerage platforms, to manage risk (00:30:25). S G, being based in the Middle East where spread betting is restricted, sought guidance on how to access IG Index's benefits, and Stephen Cox directed them to courses on the Share Navigator website and offered a link to a demo account for practice (00:27:00). Stephen Cox argued that IG Index offers a simpler platform for day trading and for those using short puts as a return-based strategy (00:29:34).

Meta Stock Discussion and Call Options Stephen Cox discussed Meta as a good long-term investment, arguing that it is undervalued due to capital spending and is currently cheaper than the other "mag seven" stocks (00:35:23). Michael Carroll inquired about trading Meta using call options, and Stephen Cox acknowledged that calls are time-decaying assets, recommending a 90-day time frame and a high Delta (around 0.7) to give the trade time to work (00:37:16). They also discussed using a bull call spread or covered calls to offset cost, noting the trade-offs of lower profit potential compared to a straight long call (00:38:20).

Gold Day Trading Strategy Stephen Cox outlined their day trading rules for gold, starting with establishing the longer-term bullish trend and checking the daily news flow (like US jobs data) that affects the dollar and thus gold prices (00:40:24). Their strategy relies heavily on the 15-minute chart and the Relative Strength Index (RSI), which uses a 0-100 scale where values over 70 are overbought and below 30 are oversold (00:41:42). Stephen Cox utilizes alerts for RSI readings below 30 or above 70 to prompt checking for trades (00:42:42).

Risk Management in Day Trading on IG Index Stephen Cox demonstrated their risk management approach on the IG Index for gold, setting a limit of no more than 2% of capital lost per trade (e.g., 200 quid on a 10k account) (00:43:34). They explained the process of adjusting bet size and stop-loss placement based on recent highs/lows and their desired maximum loss (00:44:25). Stephen Cox advised against trading around major news announcements due to volatility (00:42:42) (00:47:03).

IG Index Weekly Options and Concluding Remarks Michael Carroll asked about trading weekly options on IG Index, and Stephen Cox advised keeping strikes as far away as possible from the current price, though the premium would be lower (00:47:03). They reiterated the need for a risk management plan for weeklies, including pre-determining when to roll the trade out and down, similar to Interactive Brokers, but at a lower price (00:48:03). Stephen Cox concluded the session, noting the market's positive day and the good performance of the options trades .