Good morning, traders…
Jeff here.
Let me tell you something I learned on Wall Street…
Market downturns don’t destroy fortunes for disciplined traders — they create them.
When the indexes slide lower, fear takes over. Most people panic, sell at the worst possible time, and sit out as opportunity after opportunity passes them by.
But the truth is, these chaotic periods are some of the best trading environments … period.
Right now, the market is gripped by fear, and it’s not hard to see why…
Monday’s DeepSeek-fueled selloff has caused a bearish ripple effect across sectors. Uncertainty has reached a boiling point while volatility is spiking and most traders are too scared to act.
But this kind of environment is exactly where great options traders thrive.
When others freeze, we act. When fear sends the VIX surging, we position ourselves to capitalize on the massive price swings it creates.
Today, I’ll show you how to weaponize these conditions to your advantage…
How Fear Creates Opportunity
Fear in the market always boils down to one thing: uncertainty.
The DeepSeek fiasco has rattled investor confidence. No one knows how true (or not) the story of DeepSeek’s $6 million construction is…
That kind of uncertainty leads to knee-jerk reactions — mass selling and staggering price swings.
When panic spreads, it creates volatility. Stocks swing hard in both directions, and that’s where disciplined traders find their edge.
Historically, a VIX below 15 signals calm, while a reading above 20 shows heightened fear.
The VIX surged to 21 on Monday and I think we might see even bigger swings as the fallout from DeepSeek unfolds.
But don’t see this as a negative. While volatility can be unnerving for buy-and-hold investors, it’s a potential goldmine for options traders…
3 Ways to Win in Volatile Markets
Volatility creates opportunities for traders who know how to harness it:
1. Bigger Swings, Bigger Profits
Options traders thrive on movement. The larger the price swings, the more profit potential.
When volatility spikes, stocks make exaggerated moves in both directions. Fear-based selling can push prices below fair value, while snap-back rallies can create huge upside.
By using options, you can position yourself to profit whether the market moves up or down — so long as you’re on the right side of the trade.
But whatever you do, pay close attention to implied volatility. Avoid buying contracts with elevated IV, and try to time your trades around its “Crush…”
2. Volatility Crush and Timing
Volatility doesn’t last forever. After a spike, the market eventually stabilizes, and the premiums on options contracts shrink — this is known as “IV Crush.”
After a huge up or down move, you should wait for the dust to settle before entering new trades.
By timing your entries after volatility has cooled, you can buy options contracts at a discount and ride the next wave of price movement.
By studying how a stock’s IV moves over time, you’ll know when premiums are inflated and when they’re undervalued.
3. Using Puts as Protection
I suggest holding some puts on QQQ or SPY over the next few weeks. We don’t know how this DeepSeek thing will play out, and you want any long positions protected in the event of further downside.
But they’re not just for protection…
With disciplined timing, you can turn around and sell your puts near the bottom, using those profits to buy calls at lower levels.
This creates a “double-whammy” effect and makes put contracts an excellent tool for managing risk during periods of high volatility.
The Key to Winning in a Fear-Driven Market
Fear creates volatility. Volatility creates opportunity. But without discipline, none of it matters.
The majority of traders let emotions dictate their decisions. They panic, chase bad trades, or hesitate until the moment is gone.
The difference between “a pro and a Joe” is how they react in the face of market fear.
The DeepSeek selloff has created one of the most volatile trading environments in recent years.
While most traders see chaos, you need to see opportunity. Study the setups, follow your strategy, and don’t let emotions cloud your judgment.
This is how small accounts are built and fortunes are made. Time your moves precisely and this market could deliver your biggest wins yet.
Happy trading,
Jeff Zananiri
P.S. While most traders are scrambling to position themselves in this volatility, I’ve had a 7-win streak with my Burn Notice trades…*
If you want to start getting in on these setups before they take off, there’s only one place to start…
TODAY, January 29 at 10:00 a.m. EST, I’m hosting a LIVE WORKSHOP to reveal my top Burn Notices for this week.
Stop guessing, start burning — Click here to reserve your seat!
*Past performance does not indicate future results
