ICT Weekly Option Strategy
Also: weekly option play, SPX weekly option write, SBX option strategy, premium writing strategy, weekly option premium collection
The ICT Weekly Option Strategy is a premium-writing approach applied to SPX weekly options (referred to as "SBX" in the source, consistent with SPXW weekly options). Rather than buying options, the trader sells (writes) options to collect premium, relying on theta decay and directional bias to generate income. Core mechanics: - Bearish weekly bias: sell (write) call options above the anticipated weekly high. The premium collected is the maximum profit; maximum loss is theoretically unlimited if price runs significantly above the strike. - Bullish weekly bias: sell (write) put options below the anticipated weekly low. The premium collected is the maximum profit; maximum loss is substantial if price falls far below the strike. - The strikes are chosen above (for calls) or below (for puts) levels that the market is not expected to reach — typically beyond the anticipated weekly range. - Hold time: approximately one week (from entry to expiration of the weekly option). - Target: collect 1x to 2x the premium paid (or simply let theta decay to zero/near-zero for full premium capture). - Size guidance: start with one option contract. Do not scale aggressively until the approach is understood. Bias determination: - Weekly and daily chart analysis drives the directional bias. - HTF levels (SIBIs, weekly ranges, prior highs/lows) inform where the weekly high and low are anticipated. - The option strike is placed beyond where price is expected to reach, providing a margin of error. Risk acknowledgment: - Writing naked calls (without holding the underlying or a long call hedge) carries unlimited theoretical loss. ICT explicitly acknowledges this risk. - The strategy is not recommended for beginners; it requires a clear weekly/daily directional framework and discipline to hold through noise. - Gap risk is a specific concern in volatile macro environments (geopolitical events, NFP, FOMC).
Identification4
- Establish a clear weekly and daily directional bias using HTF analysis (SIBI/BISI levels, prior weekly ranges, order blocks).
- Bearish bias: identify the anticipated weekly high level — the level you do NOT expect price to reach or exceed during the current week.
- Bullish bias: identify the anticipated weekly low level — the level you do NOT expect price to reach or breach during the current week.
- Select a strike price above (for short call) or below (for short put) the anticipated extreme. The farther OTM (out of the money) the strike, the less premium collected but the greater margin of error.
Entry4
- Sell (write) one call option above the anticipated weekly high (bearish bias).
- Sell (write) one put option below the anticipated weekly low (bullish bias).
- Enter near the beginning of the week to maximize theta decay capture over the full week.
- Use limit orders on the option sale to ensure adequate premium is received.
Stop3
- No fixed stop in the traditional sense — the position is managed by monitoring price proximity to the short strike.
- Close the short option if price trades near the strike level or if the option premium has doubled (2x the collected premium is the informal stop).
- Alternatively, buy a further OTM option to cap the loss (convert to a spread) if concerned about unlimited loss.
Target2
- Full premium capture: let the option expire worthless (or buy back for a near-zero debit).
- Partial target: close the position when premium has decayed to 1x to 2x the collected amount (i.e., if you collected $5 premium, close when it trades at $2.50 or less).
Invalidation3
- HTF bias changes significantly during the hold period (e.g., a surprise macro event breaks structure).
- Price approaches or threatens the short strike level — this is the signal to manage or close the position, not hold to expiration.
- Gap risk: opening gaps on Monday or after high-impact news can rapidly move price toward the short strike.
Inferred Conditions (Unvalidated)
- The strategy is an income/carry approach, not a directional trade in the conventional sense — profit comes from time decay, not from price movement.
- The 'SBX' terminology used in the source likely refers to SPXW (CBOE's weekly-expiring SPX options), not a separate instrument.
- Starting with one contract limits absolute dollar risk while learning the approach — the leverage of options means even one contract represents significant notional exposure.
- The weekly high/low anticipation framework draws on ICT's broader range-projection methodology (weekly profile, SIBI/BISI anchors, liquidity pool analysis).
ICT Quotes
"what I like doing, and what I used to do as a younger man, was look for weekly option plays"
"you're looking for one really good setup per week, and you're holding the trade for about a week or so"
Timeframes
Version History1 version
ICT YT - 2025-03-30 - 2025 Lecture Series - Weekly Option Strategy Intro 03-28-2025.srt
"what I like doing, and what I used to do as a younger man, was look for weekly option plays. You're looking for one really good setup per week, and you're holding the trade for about a week or so."
First introduction of the ICT Weekly Option Strategy in the 2025 public content. Describes writing SPX (SBX) weekly options to collect premium, selling calls above anticipated weekly high (bearish) or puts below anticipated weekly low (bullish). Start with one contract. Target 1x-2x premium collection via theta decay. Hold approximately one week. Acknowledges unlimited loss risk on the write side.
Notes
Introduced March 28, 2025 (video published March 30, 2025). This is a departure from ICT's primary focus on futures contracts (NQ, ES, EUR/USD). The strategy leverages ICT's existing weekly range / directional bias framework and applies it to the options market as a premium-collection vehicle. "SBX" in the transcript is interpreted as SPXW (CBOE weekly SPX options) based on context. These are cash-settled, European-style options that expire weekly — consistent with the "holding for about a week" description. Risk warning: selling naked options without a hedge carries unlimited (calls) or very large (puts) theoretical loss. The 1x-2x premium doubling as an informal stop is not a formal risk management rule — it is a suggested guideline from this single lecture. This concept interacts with: weekly-range-profile.yaml, sibi-bisi.yaml, liquidity-pool.yaml
Asymmetry Notes
Structurally symmetrical — short calls for bearish weeks, short puts for bullish weeks. However, in practice, short calls carry theoretically unlimited upside risk while short puts carry substantial (but bounded by zero) downside risk. The risk profile is therefore asymmetric: short puts have a defined maximum loss, short calls do not.