Good morning, traders…

Two clashing stories are playing out at the same time.

First, The September Effect…

40 years of seasonality show September as the worst-performing month in the history of the stock market. 

In fact, it’s the only month with cumulatively negative S&P 500 returns. 

And this September started on brand with a 1.5% gap-down in the S&P 500. 

Most traders see this information and panic. 

But while they worry about calendar effects, Smart Money traders quietly accumulate positions in quality names trading at artificial discounts.

The same pattern plays out every September. Fear creates opportunity for those willing to look beyond the obvious narrative.

The odds of a Fed rate cut this month sit at 89%. And the next three months usually finish the year strong. 

Yet most traders will spend the next four weeks avoiding setups they should be hunting.

While Everyone Else Panics About September, I’m Building My Biggest Watch List Of 2025…

My Week 1 September Watchlist

MicroStrategy Inc. (NASDAQ: MSTR)

Smart Money poured over $10 million into September 5th $355 calls on Friday afternoon. The daily chart is sitting right at the 200-day moving average, providing an attractive risk/reward setup. I’m watching for a strong-volume move above $340.

UnitedHealth Group Inc. (NYSE: UNH)

Warren Buffett announced a $2 billion stake in this company, but it still hasn’t made a huge move. Now that the Smart Money is buying. Coincidence? I think not. I’m targeting $320 calls if it breaks $310.

The Coca-Cola Company (NYSE: KO)

A defensive play bouncing off the 200-day moving average. Everyone still wants their fizzy sugar water. I’m looking at September 19th $70 calls above $69.50.

Medtronic plc (NYSE: MDT)

Clean resistance at $92.85. My scanners showed beautiful size hitting October $95 calls on Friday. This has legs above that level.

Apple Inc. (NASDAQ: AAPL)

Three attempts at resistance. I’m targeting September $235 calls above $234.

Alphabet Inc. (NASDAQ: GOOGL)

Relative outperformer on Friday. Pullback to $208 creates opportunity for October $210-215 calls.

Tesla Inc. (NASDAQ: TSLA)

TSLA is consolidating at the point of control around $326. That trendline support looks primed for a break higher.

iShares MSCI Emerging Markets ETF (NYSEARCA: ETHA)

Ethereum is testing key support after a record-breaking run. I’ve been holding calls for months. Now, I’m adding November $33 calls as the chart’s back at $31 support.

My 1 “September Short”: NVIDIA

I’m not gonna sugarcoat it: the NVIDIA Corporation (NASDAQ: NVDA) chart looks ugly following its recent earnings report. 

Three failed attempts at holding support have created an inverse breakout pattern. 

I alerted the September 5 $165 Puts as the stock flushed through $168.50 yesterday. 

2 Overlooked Strategies To Consider in September

September’s uncertainty creates a great opportunity for spread trading — but only if you understand how it works.

Credit Spreads

To open a credit spread, you buy and sell contracts of the same type on the same stock. The strike you sell should be closer to the money than the strike you buy. 

Why would traders do this? Because a credit spread puts money in your account as soon as you open it.

Then you’re hoping the bid/ask spread between your two strikes narrows. And if so, you keep the credited premium — plus any additional profit. 

Critical Warning: Credit spreads can assign you shares if you hold through expiration. Never let short-term credit spreads expire in the money. Exit by 2:00 PM on expiration day (or face potential margin calls).

I’ve seen traders blow up accounts with naked puts and calls. Don’t join the Wall Street Bets hall of shame with million-dollar margin calls.

Hold this thought. I think you’ll understand credit spreads better once we go over debit spreads…

Debit Spreads

Debit spreads are the opposite of credit spreads. 

You still buy and sell contracts of the same type on the same stock… 

But this time, the strike you buy should be closer to the money than the strike you sell. 

Another key difference: where you’re paid to open a credit spread, it costs you money to open a debit spread. But there’s more potential upside in trading debit spreads — higher risk/higher reward. 

Debit spreads are more of an option buyer’s strategy, while credit spreads tend to appeal to option sellers. 

Bull call spreads (and bear put spreads) are the most popular forms of debit spreads.

These spread plays work best if you think a stock is going up with a very clear price target in mind. 

In these sorts of setups, all you need to do is buy a strike in your target range and sell the strike nearest to your high-end price target.

Debit spreads are cheaper trades to enter than if you just buy naked calls or puts. That’s an advantage during September when conditions are less clear. 

September tests your discipline more than your analysis. The setups are there, you just need to wait for proper entry points.

Happy trading,

Ben Sturgill

P.S. Want to learn how to execute trades like this?*

The best place to start is in our Smart Money Workshops.

You’re one click away from the best setups in the options market. 

Join us this THURSDAY, September 4 at 4:00 p.m. EST.

*Past performance does not indicate future results