By Chris Ebert

Ever notice how radio content varies with the frequency?

This may come as surprise to those in the younger generation who are apt to get their music on devices other than old-fashioned radios, but the content indeed varies. In most cities, there are very few Top-40 stations near the 88 Megahertz area. Rather, that range tends to be populated with alternative themes – classical music, religious outreach and the like.

Generally, it really isn’t until one gets up to approximately the 94 Megahertz range that one encounters popular music – the so-called Top 40 genre. Sure, there are exceptions in some cities; but it’s not the rule. Popularity seems to prefer certain frequencies.


Popularity among stocks has a similar tendency. There are certain Temperatures in which the S&P 500 tends to broadcast well, and others at which it is ignored by traders.

An S&P 500 Temperature in the 100 to 200 range has typically been a popular place.

Below 100, while attractive to alternative types of traders (buy-the-dippers, short-sellers, derivatives traders, etc.) is not an area where the average individual trader is likely to feel tuned in. Likewise, most individuals are just as ill equipped to tune in when the Temperature tops 200 as they are to tune into a radio signal over 108 Megahertz. The environment when the S&P Temperature is below 100 or above 200 is not typical, and thus not popular for most.

There are very few radio stations that can advertise that they are at the top of the charts broadcasting at 88 or 108 Megahertz; but there are countless ones broadcasting a few Megahetrz either side of 100.

There’s a reason for that. Popularity!

An S&P 500 Temperature in the 100 to 200 range is like a close friend – it’s familiar… rational… comforting. Anything outside that range is likely to be appealing only to those who prefer alternative music. At the moment it seems the only ones who are likely tuned in to the stock market are alternative-music fans. Not everyone can ride out a 400-point daily drop in the Dow (like the one that occurred last Friday) followed by a 300-point gain (like the one that occurred the next Monday). But some folks love that kind of thing. Others just turn off the radio.


* Option strategies referenced above are analyzed for profit or loss on expiration day only and are opened using an at-the-money strike price, 4-months to expiration, using options traded on a broad-based ETF such as $SPY (NYSEARCA:SPY)

The preceding is a post by Christopher Ebert, Chief Options Strategist at Astrology Traders (which offers subscribers unique stock-trading perspectives and options education) and co-author of the popular option trading book “Show Me Your Options!” Chris uses his engineering background to mix and match options as a means of preserving portfolio wealth while outpacing inflation. Questions about constructing a specific option trade, or option trading in general, may be entered in the comment section below, or emailed to


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