Moving Average Crossover Filter: Trade With the Trend
Use the 50/200-day moving average crossover filter to bias the wheel toward stocks in long-term uptrends or downtrends.
What MA crossovers tell you
The Moving Average Crossover filter compares the 50-day SMA to the 200-day SMA on the underlying stock:
- 50 > 200 ("golden cross posture") = stock in a long-term uptrend.
- 200 > 50 ("death cross posture") = stock in a long-term downtrend.
- Any = no trend filter.
For wheel sellers:
- Selling CSPs in uptrends is statistically friendlier (the trend is bullish).
- Selling CCs in downtrends lets you exit gracefully if the rally never comes.
Where to find it
The Moving Average Crossover dropdown is in the sidebar of both screeners with three options: "Any", "200 > 50", "50 > 200".
A worked example
You want CSPs only on stocks in confirmed uptrends:
- Open the Put screener.
- Set Moving Average Crossover = "50 > 200".
- Set RSI = 30 – 60 (no overbought).
- Sort by Rating descending.
You're now selling premium with the trend at your back.
Common mistakes
1. Treating it as gospel. A stock in a "golden cross" can still gap down on bad news. MA is context, not certainty.
2. Using only the crossover. The MA filter is best layered with momentum (RSI) and proximity (Stock vs DMA) filters.
Where to go next
- Pair with Stock vs DMA filter for proximity.
- Add RSI filter for momentum.
Frequently Asked Questions
Is a golden cross a buy signal for option sellers?
It's a confirmation of an uptrend, not a guarantee. For wheel traders, a golden cross is a friendlier environment to sell cash-secured puts because the trend is bullish.