The screens mean nothing, but they mean everything

BY ANDREW GIOVINAZZI

October 11th, 2025

Yo Pit Crazies,

 

Well that was quite a selloff on Friday, but only 2.7% from the all time high just Friday morning. I was so busy trying to close SPY put spreads in Weekly Profit Cycles that I did not notice the bloodbath in crypto. 

 

It was ugly, see below:

 

 

More than $9.5 billion was wiped out on over-leveraged crypto accounts. Traders thought stops would get them out but not when this happens in the SPDR S&P 500 Trust ETF (SPY) or junkcoin:

 

 

Some of you may or may not know this but I was a floor trader and exchange member for 15 years before joining Option Pit with Mark. 

 

I was the liquidity. 

 

It taught me a lot about the nature of markets and human behavior. Part of what I instill in students is understanding the other side of the market. Makes it easier to understand if a trade will fill.

 

All those blips and blinky lights are someone’s money. The difference is once a market maker sells something, the price changes. Almost any business I can think of knows the input price first, then charges a price and locks in a profit. That is why inflation wreaks havoc on economies.

 

Market makers, on the other hand, sell options and the price can keep changing regardless of initial input price. That is why liquidity is such a fickle thing. One minute it is there and the next minute it is not. 

 

Friday it was not. 

 

Tweets and news events happen fast. Traders can pull liquidity in microseconds. So the screen means everything, and then it doesn’t.

 

A few things about leverage:

 

  • Make sure short options are cash secured.
  • Don’t sell uncovered calls, use spreads instead.
  • Keep some cash in the account at all times. 
  • If the short options go to full value, make sure there is cash to cover.

 

Any long strategy works in a bull market and highly leveraged strategies work unbelievably well. But a selloff can wipe out any profits along the way, and possibly the whole account.

 

I took delivery in a couple stocks this week and expect to collect a dividend and sell some calls and make boring dollars on them. All are cash secured and I own some puts just in case to stop the value if Friday’s meltdown becomes a full fledged route.

 

 I will sell those puts if they jump. 

 

If you’re not holding some protective puts, well, you should be.

 

This coming week should be exciting with lots of opportunities. 

 

My Make America Healthy Again stocks were all green on the day so stability will look good on a very volatile week.

 

Come join my live event on Tuesday at 1:00 p.m. eastern.

 

Click here to add it to your schedule.

 

To Your Trading Success,

 

AG

Andrew Giovinazzi

Andrew Giovinazzi

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About the Author

Andrew Giovinazzi

Andrew Giovinazzi

Former CBOE floor trader and CIO at Karman Line Capital. Author of ‘The Option Traders Hedge Fund’ with over 30 years of options trading experience.

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