Thursday, August 20, 2026 · Full replay below
Last week we went through Tom Sosnoff’s favorite strategies and ended up disagreeing with him on four. This week we flipped the card and went through the six he avoids — and this time we mostly agreed with him.
But “avoid” isn’t “never.” The useful part of the hour was finding the one narrow spot where each of these actually earns its place — short-dated, high-volatility, a black-swan hedge, a lottery ticket into a Fed day — and the single “least-used” structure Tony Rihan runs in Portfolio 1 as a real position. One aside worth keeping, from Tony B: he prefers “least used” to “least favorite.” “Least favorite sounds so negative.”
The Six, and Where We Land on Each
Tom’s rule of thumb is that these are the trades that pay theta the wrong way, need a big move to work, or are simply too fiddly to manage. Here’s each one, the live example we built on screen, and our verdict.
1. Calendar spread — sell a near-dated option, buy a longer-dated one at the same strike; it moves slowly and uses almost no buying power. → We tell new traders to use it — and it’s one of our least-used too. A calendar moves in pennies. Ten to twenty percent is a realistic take, thirty percent is a home run, and the absolute best case is roughly doubling your money on a perfect expiration pin. We’d rather do a diagonal. On the same HOOD example, a $10-wide diagonal for about $5.11 can pay close to one-for-one anywhere above the strike — because on a diagonal you actually know your maximum profit. [00:18]
2. Butterfly — “the Muhammad Ali trade” (float like a butterfly) — a defined-risk bet that the stock pins your middle strike. → Least-used written all over it — but with two real exceptions. As a portfolio trade it’s a 12–30% probability of profit, negative theta, and a make-two-risk-one payoff that’s the opposite of everything we do. But Tony likes it in two spots: short-dated 0- or 1-DTE, where it’s really just a synthetic iron condor, and when volatility is very high and flies get cheap — then it’s a cheap shot up or down. Remember the math: volatility expands the most, in percentage terms, when it’s lowest. [00:25]
3. Long straddle / strangle — buy both sides and wait for an outlier. → The best of the least-used strategies — because it’s the only one that actually moves in dollars, not pennies. The catch is you pay for two sides and bleed theta for weeks waiting. Moderna was the cautionary tale: one huge up day, one huge down day — but hold it for three years and you’d have lost nearly every time, because the stock went nowhere. Our fix: if you’re going long, buy one side (the call), and if you love strangles, sell only the put side. Tony B’s old money-maker — selling 30-day SPY straddles, three units every Wednesday, taking 25% — worked because implied volatility was high back then. The game changed. [00:33]
4. Back-spread (sell one, buy two) — the mirror image of the ratio spread we live on. → “The valley of death.” Break-even sits well outside the expected move, the odds of the big payoff are under 10%, and the loss ratio is ugly — Tony called it worse than a long straddle. But it has two homes: an earnings or pharma home-run shot where volatility is already huge, and a very short-term black-swan hedge on the put side of an ETF, where volatility expands on the way down. It’s the opposite of our bread-and-butter one-by-two, and that’s exactly why it hedges it. [00:41]
5. Long out-of-the-money option — buy a cheap directional lotto ticket. → Hard for a premium seller to buy premium — but don’t hate it if you’ve done the work. The upgrade is to verticalize it: buy a spread instead of a naked long, risk a buck to move from one to two standard deviations, and let skew make the far wing cheap. Tony called a Tesla put vertical at a 13% POP “an intelligent trade, even though it’s low-probability — it fits your assumption.” The one place the outlier reliably shows up is a Fed day — a long strangle the day before is a real lottery ticket, because that’s where 0-DTE sellers get blown out. The hard part is psychological: flipping from seller to buyer is like being a Dodgers fan and rooting for the Cubs. [00:48]
6. Iron fly — “Mr. Sosnoff, I don’t fly.” → Neither of us has ever seen Tom put one on — it’s not even in the platform. And there’s a reason: an iron fly is synthetically the same trade as a butterfly. Same payoff, you just collect a credit instead of paying a debit — for four legs instead of three, four commissions, and a harder fill. Save yourself the trouble and do the butterfly. [00:53]
The scorecard: we agreed with Tom on all six as main strategies — none belongs at the core of a premium-selling book. Every one of them is, in Tony’s words, “a shot trade.” The value was in mapping where each shot is worth taking.
The One “Least-Used” Trade We Actually Run
The best fifteen minutes came from a member question, and it’s the one structure on the whole list we run as a real position. Tony Rihan calls it “the stupid.” Tony Battista calls it “the smart.” It’s the same trade:
A short put spread and a long call spread — two bullish trades that both want the same thing.
On a beaten-up Nasdaq name with high call skew, it’s defined-risk and high-probability. In the Tesla example, the 330/320 put spread plus the 370/380 call spread came in around an 87% probability of profit on the put side, with max profit over $1,000 if the stock ran. The target: about half the width of the strikes.
Tony Battista runs a variation — sell the naked put (not the spread) and add the call spread as a “kicker.” He does it after an extreme, a 5–10% market drop, in an ETF: the put skew makes the naked put fat, and the call spread is priced fairly because there’s no call skew to fight. “A big, fat naked put, and a nice kicker of a call spread.”
And Tony Rihan has one on in Portfolio 1 right now — a December structure, sold the put and bought the call spread. Up nicely one day, down $238 the next. As he put it: “you didn’t get the direction you needed.” Direction is the whole game on this one — which is exactly why it lives on the “least-used” list and not at the center of the book.
Where Our Own Books Are — and What It Connected To
Both portfolios are running light on purpose, in a tape Tony B kept calling “rudderless” — low volatility, no capitulation, a stock-pickers’ market rather than an ETF market.
Portfolio 1 is under 8% buying power — four SPY units, three /MES, a “stupid” SPX structure, and one TLT synthetic that’s the problem child, down about $1,500 on the year with calls sold against it. That’s the position we managed this week (the covered-call overlay) and the one behind the TLT chart in this weekend’s Market Intelligence — bonds sitting on their 52-week low.
Portfolio 2 is three-to-four units light, heavier in the Qs (down roughly twice as much as everything else), delta a bit high. The QQQ ladder question a member asked on the show is the exact position we rolled out to August 26 for a $150 credit the very next morning — you saw the alert.
If you want the macro behind all of it — why rates shook the tape, and why we’re not maximally deployed into NVIDIA earnings and Jackson Hole — it’s all in this weekend’s Market Intelligence email.
For Members — What To Do With This
If you’ve been buying naked long options as your shot trades, verticalize them. Same directional bet, a fraction of the theta bleed, and skew works for you instead of against you. Risk a dollar to reach for the outlier rather than five.
If you’re tempted by a butterfly or a calendar, ask one question first: how many days? These are short-dated tools — 0-DTE, 1-DTE, or a high-volatility shot. As a 30-to-45-day core position they pay you in pennies while your capital sits still.
And if you want the one structure worth studying, it’s “the smart” — the short put spread paired with a long call spread on a washed-out name. Two bullish trades pointing the same way, defined risk, target half the width. It’s on the least-used list only because it needs you to get the direction right.
The rule that anchors all of it, straight from the Q&A: on a $100,000 account, three to five short puts, and keep your eye on the deltas — not the price.
Where Else To Find Us
Tony “the Bat” Battista is on lossdog.com — and his new show, One Lucky Dog, with Tom Sosnoff, Scott Sheridan and the beautiful Sol. (His words: “less guys, more Sol.”)
Tony Rihan is on X at @TFMTrades.
And the full method — the “trade plan” a member asked about — is the Options Selling Masterclass in the Education tab of the members portal. Start there, then the portfolios, then the trades. Trades are last.
Thank you for the hour, and for the questions — a couple of them are the reason this recap has a section on the one trade we actually run.
And to close it the way he always does: you’ve got to risk it to get the biscuit.
📺 Watch the Replay
Roughly 68 minutes. Timestamps below if you want to jump around.
