January 25, 2026
When Volatility Pays us Income …
Written by a human (me), not Ai.
In case you missed it, Trump threatened (or blackmailed) allies with tariffs over Greenland. Followed by disgraceful comments about NATO’s role in Afghanistan.
For two days, markets briefly wobbled then continued as they were.
For income investors, the interesting thing was the volatility.
Volatility can be charted – it’s called the VIX index (also known as the fear index). It’s the red line in the chart below.
VIX sets the price for Options income. In plain English, higher volatility (VIX) means options pay higher income.
On Tuesday I captured this opportunity in my own portfolio. This higher volatility raised my income by 40%. My thinking is below ..
VIX rose as stocks wobbled on Tuesday – Notice that whenever stocks wobble, VIX rises …
How uncertainty raises income
- News creates uncertainty
- Uncertainty pushes volatility (VIX) higher
- Higher volatility increases options premiums
- Higher premiums = better income for option sellers
As shown in the chart, the market wobbled briefly which also raised VIX.
As markets rebounded, VIX calmed down. The uptick in VIX was my opportunity to earn higher income.
My Thinking …
We saw this play out last April too, during which I reminded our community to embrace the opportunity. Trump has since acquired a reputation, with the TACO label.
So Tuesday presented an opportunity to take advantage of a momentary rise in VIX, hence higher options income.
When income rises …
When markets are calm, option income sits within the 1-3% per month range.
When markets wobble, and VIX rises, income improves, provided we have a structured approach.
We follow a rules-based process that allows us to get paid while still respecting risk.
Options to enhance your portfolio
Some people mistakenly believe options are speculative. Our investor community knows options are a safer way to invest.
Options are a powerful addition to our portfolio. Our core portfolio gives long-term, set-and-forget growth.
Alongside it, options allow us to generate income for today – and more so when markets are unsettled ..
Always Remember:
- Time in the Markets always beats timing the markets
- Stay Diversified
- Minimise those leakages: Fees, Inflation, and Taxes
- Financial Markets are a great source of recurring income
- ETFs, Balanced Funds and Options achieve all the above
- Being educated helps you outperform 99% of the population
… to ensure your investments work for YOUR financial freedom (not someone else’s)
And …
For more guidance, our Investment Academy will help you implement all of this in a step-by-step way.
Thousands of people have learnt how to diversify and pound-cost-average into low-cost, set-and-forget ETFs & Funds for inflation-beating growth. And Options to create recurring income.
Click here to learn about our Investment Academy
Finally …
– Don’t take the above as advice as it may not apply to you personally
– Your Capital is at Risk
– You may not be covered by the FSCS
– Anything mentioned in a podcast or in a previous article was valid at that time and may not continue to be now
