Wall Street’s 60/40 formula was born in 1952 — the same year as the first credit card. A lot has changed since.
That’s why we created a new approach — The H.E.A.T. Formula — to empower investors to spot opportunities, think independently, make smarter (often contrarian) moves, and build real wealth.
Table of Contents
🔥 Here’s What’s Happening Now
In Friday’s note we talked about rare earths, then this happened….
I gave my thoughts to the Schwab Network later in the day…..
.@TuttleCapital says Friday's sell off following President Trump's remarks on China is a "buying opportunity."
He adds that investors "won't see anything meaningful until you see a slowdown in AI CapEx" or if the Fed changes course.
For more market news, tune into:
— #Schwab Network (#@SchwabNetwork)
7:55 PM • Oct 10, 2025
The market has been going up in pretty much a straight line, and as much money as Trump is making you (you should be following the Trump’s Inner Circle playbook) you know that every once in a while he’s going to throw a monkey wrench into things.
We pretty much have the playbook for this from earlier in the year……
That’s pretty much what we are seeing this morning as we look to be getting half of Friday’s move back.
Remember though, prior Friday’s move a bunch of areas where already looking toppy. We pointed out homebuilders as a potential short last week…..
But there were a number of other areas we could have pointed out as well. So, while I do think dips should be bought, and I did a bit on Friday, I think you ought to be cautious up here.
I also saw a lot of stories like this on my feed over the weekend. So I decided to make today’s newsletter about hedging (below)….
I counted 1010 traders that are down $100k+ today and 206 traders that are down $1M+ today on Hyperliquid
358 of those accounts lost everything and have ~0 balance, including one person who lost all $19M+ in their account
— #Conor (#@jconorgrogan)
11:12 PM • Oct 10, 2025
The move in crypto was especially interesting….
Bitcoin is pulling an undercut and rally at the 200 day…
Ethereum is looking to get back over the 10 day…
💡 Option income without losing overnight returns
Most covered call ETFs cap upside.
We fixed that with $BITK – Tuttle Capital IBIT 0DTE Covered Call ETF
• Sell calls each morning, expiring same day
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— #Matthew Tuttle (#@TuttleCapital)
1:50 PM • Oct 8, 2025
Why Covered Call ETFs Suck-And What To Do Instead
Thursday October 23rd 2-3PM EST
Covered call ETFs are everywhere — and everyone thinks they’ve found a “safe” way to collect yield in a sideways market.
The truth?
Most of them suck.
They cap your upside, mislead investors with “yield” that’s really your own money coming back, and often trail just owning the stock by a mile.
Join me for a brutally honest breakdown of how these funds actually work — and what you should be doing instead.
What You’ll Learn:
🔥 Why “high yield” covered call ETFs are often just returning your own capital
📉 How most call-writing strategies quietly destroy compounding
🚫 Why owning covered calls in bull markets is like running a marathon in a weighted vest
💡 The simple structure that can fix these problems — and where the real daily income opportunities are hiding
🛡️ The H.E.A.T. Formula Hedging Playbook
Hedging isn’t about being bearish. It’s about staying dangerous when the rest of the market panics.
I hope to have OHNO out in January. It will follow many elements of the strategies I am describing below with a whole lot more sophistication to it. In the meantime, this is how I would hedge your portfolio.
I believe you should have a static hedge, the amount depends on your own taste. Bonds are not a hedge, they did offer some protection on Friday but they don’t always work. For something to be a hedge it has to go up every time the market goes down.
I would suggest ramping your hedges up when the odds are not in your favor. I often compare trading and investing to poker and blackjack. In cards you bet more when the odds are in your favor and you fold or bet less when they aren’t. You can learn to do the same in markets. Beyond the scope of this newsletter today, but perhaps I’ll do a webinar on it at some point.
⚖️ 1. Ratio Put Spreads — The Smart Speculative Hedge
Sell ATM. Buy 2 OTM. Designed to win big if the market really drops, but breakeven or better if it rips higher.
Example (SPY or QQQ):
Sell 1 SPY ATM put
Buy 2 SPY OTM puts
Structure for $0 net debit or small credit
🎯 Best Case: SPY dumps to below you OTM puts
💥 Worst Case: SPY closes around or in between your puts (flat/down a little), where loss is highest.
📈 Upside: SPY rallies → all of your puts expire worthless, if the trade was for a credit you keep the credit, it if was breakeven then you breakeven.
This is not a gentle hedge—this is for when you think we nuke.
✅ Great on: SPY, QQQ, IWM
🧠 Use smaller size than typical put spreads—it’s a sharp tool, not a sledgehammer.
🧯 2. SPY Put Spreads — Classic Capital-Protected Hedge
Simple. Defined risk. Still works.
Example (QQQ):
Buy 1 QQQ ATM put
Sell 1 QQQ OTM put
Net debit ~1.00–1.50%
No fancy payoff curve here. Just a reliable band of protection if markets slip.
Tighten the strikes if vol is rich or stretch them wider if you want tail protection.
✔️ Use for hedging into known catalysts
🧪 Pair with long equity to keep core exposure
🌋 3. VIX Call Ratio Spreads — Long Vol, Not Long Bleed
Same logic as equity ratio spreads—just inverted.
Example:
Sell 1 VIX ITM call
Buy 2 VIX OTM calls
You want zero cost or small credit going in.
If VIX explodes you print.
💡 Why it works: Most people buy VIX calls and get destroyed on decay. You structure a better entry and only get paid when vol really spikes.
The cool thing about a VIX ratio spread is that in a panic the VIX can really spike. In this case a small spread could expand and protect a much larger part of your portfolio.
💣 4. VIX Call Spreads — Low-Risk Vol Hedge
When vol is crushed and nobody expects anything bad.
Example:
Buy 1 VIX ITM C / Sell 1 VIX OTM C
Debit ~0.60–0.75
Defined risk. Decent reward.
This is your insurance trade for war, rate shock, or market puke.
🧨 5. ARKK Puts / Short Calls — Hedge the Hype
When the bubble pops, ARKK is your canary.
Option 1: Long Puts
Great for directional plays during broad tech re-rating
Cheap way to hedge speculative beta (vs. just shorting QQQ)
Option 2: Short OTM Calls
Sell weekly calls 5–7% above spot
ARKK often fails to hold rallies, making this a great vol-harvesting play
🧠 Summary Grid
Strategy | Best For | Risk/Reward | Ideal Use |
|---|---|---|---|
Ratio Put Spread | Tail hedging w/ optionality | 🟧 Asymmetric | Low vol, directional edge |
SPY/QQQ Put Spread | Core hedge | 🟨 Defined | General protection |
VIX Call Ratio | Cheap tail vol | 🟧 Asymmetric | Vol spike setups |
VIX Call Spread | Simpler vol hedge | 🟨 Defined | Macro event hedge |
ARKK Puts/Calls | Bubble hedge | 🟥 Speculative | Tech unwinds, sentiment fades |
📬 In Case You Missed It
Be a while before I can launch this, but preview of coming attractions…..
🤝 Before You Go Some Ways I Can Help
ETFs: The Antidote to Wall Street
Inside HEAT: Our Monthly Live Call on What Wall Street Doesn’t Want You To Know
Financial HEAT Podcast https://www.youtube.com/@TuttleCap Freedom from the Wall Street Hypocrisy
Tuttle Wealth Management: Your Wealth Unleashed
Advanced HEAT Insights: Matt’s Inner Circle, Your Financial Edge
The views and opinions expressed herein are those of the Chief Executive Officer and Portfolio Manager for Tuttle Capital Management (TCM) and are subject to change without notice. The data and information provided is derived from sources deemed to be reliable but we cannot guarantee its accuracy. Investing in securities is subject to risk including the possible loss of principal. Trade notifications are for informational purposes only. TCM offers fully transparent ETFs and provides trade information for all actively managed ETFs. TCM's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. Trade notification files are not provided until full trade execution at the end of a trading day. The time stamp of the email is the time of file upload and not necessarily the exact time of the trades. TCM is not a commodity trading advisor and content provided regarding commodity interests is for informational purposes only and should not be construed as a recommendation. Investment recommendations for any securities or product may be made only after a comprehensive suitability review of the investor’s financial situation.© 2025 Tuttle Capital Management, LLC (TCM). TCM is a SEC-Registered Investment Adviser. All rights reserved.