What Works When the Market Is Greedy? Options, Futures and Stocks by Fear & Greed Zone

Four groups of strategies, each split by the Fear & Greed reading known before the session. Greed means 55 and over; fear means 45 and under. The same trades on both kinds of days show whether the mood changes the result.

Dollars per trade per SPY contract, opened at 10:30 and held to expiry about 3 trading days out, at mid prices. An expected move is what the options market prices for the move — here the price of the at-the-money straddle. A short strangle sells a call above and a put below the price; a short straddle sells both at the price; an iron condor is a short strangle with cheaper options bought further out to cap the loss.

— = not reported. Selling puts made money in both zones, so it is not a greed effect. The covered call beat shares on greed days and lost to them on fear days, but both gaps sit inside the luck range. The same signs showed at 0 and 1 day to expiry, only weaker: the 1-day strangle made +$43 a trade, and just +$9 in the first half of the period.

An option seller is paid for the move the market expects and loses only when the real move is bigger. On greed days the options market already priced less: for the next day, an expected move of 0.70% of SPY’s price, against 1.00% on fear days. And prices then moved even less than that. Small moves on cheap-looking options are the best case for a seller and the worst for a buyer — which is why selling paid and buying lost.

The calm shows in plain prices too. From 2016 to 2026 SPY’s typical daily swing was 0.75% on greed days against 1.0–2.1% on fear days. From 2022 to 2026 the standard deviation of SPY’s moves in a day was 0.63% on greed days against 1.61% on extreme-fear days.

What did not change is direction. SPY’s overnight moves (close to next open) and daytime moves (open to close) were no different by zone in 2022–2026. Greed days are not up days or down days; they are quiet days. That is why the index helped choose what to sell but did not call the market.

Our futures rules on greed days, risking $900 a trade, in dollars per session. The t-score shows how far a result sits from zero compared with its own noise: the further from zero, the less likely it is chance. NQ, ES, YM and RTY are the Nasdaq-100, S&P 500, Dow and Russell 2000 futures.

The overnight edge is not a greed effect: it earned as much on fear days. What greed changed is the short side, which lost clearly, and the day-trading rules, which mostly lost.

An equal-weight basket of 30 well-known stocks and ETFs, October 2016 to October 2026, in dollars a day per $10,000. The 200-day trend rule holds a stock only while it is above its 200-day average; dip buying buys after a drop. The 30 names were chosen with hindsight, which flatters every row.

— = not reported. On greed days the 200-day trend beat buy and hold in both halves of the decade (t 3.2 against 3.4 for holding). The short-term signals were in the market on only 2–6% of greed days. Growth stocks beat defensive ones by the same amount in greed and in fear.

Splitting results by zone shows where a rule earns. Adding the index as a filter is a harder test: does it still help once everything else has been tried?

With many structures and only a few hundred greed days, some results will look good by chance. These checks separate the ones that held from the ones that did not.

• !One mostly rising market: the options test covers January 2024 to October 2026, 678 days with 256 greed days. Greed in a falling market may behave differently.
• !High win rates hide big losses: the short strangle won 83% of greed-day trades, but its worst trade lost about $1,100 per contract, against an average gain of $111.
• !Overlapping positions: a new trade opens every day and lasts about 3 trading days, so several are open at once and move together. The real risk at any moment is a stack of trades, not one.
• !Costs and size: on XSP (mini S&P 500 index options) the edge per contract was a tenth as big while the fee stays $0.55 a leg, so the condor turns about negative after the bid-ask spread.
• !Prices: the last trade was taken as the mid price, and positions were held to expiry. Take-profit or stop exits, and expiries longer than about 3 trading days, were not tested.
• !The stock basket of 30 names was chosen with hindsight, and the futures results on real contracts cover only 2024–2026.

• The index: the stock market’s Fear & Greed index, 0 to 100, stored for every session since January 2011 (3,943 sessions to October 9, 2026). Each session uses the last reading known before it opened.
• Zones by the index’s own edges: extreme fear under 25, fear 25–45, neutral 46–54, greed 55–74, extreme greed 75 and over. “Greed days” means 55 and over; “fear days” means 45 and under.
• Options: SPY option prices on 678 trading days, January 29, 2024 to October 9, 2026. 16 structures opened at 10:30 New York time and held to expiry, at three expiries (same day, next, furthest stored ≈ 3 trading days); strikes set in expected moves (the at-the-money straddle’s price); the last trade taken as the mid; dollars per trade per SPY contract.
• Futures: 8 rules from our futures tools, each both ways, long only and short only, risking $900 a trade, on QQQ and SPY 1-minute bars 2016–2026 and real NQ, ES, YM and RTY futures 2024–2026; dollars per session.
• Stocks: daily bars of 30 stocks and ETFs, October 2016 to October 2026, in an equal-weight basket; dollars a day per $10,000.
• Butterflies: 432 replays (6 rules × 2 wing widths × 12 entry times × both sides, puts only or calls only) on the same 678 days, after fees, at mid prices.
• Luck checks: the zone labels shifted onto other days hundreds of times (about 620 for options); a result counts only if few shifted runs beat it. Both halves of each period checked separately.