The Robo ratio is illustrating that the market is still nowhere near a permanent top. There are still far too many retail traders who are bearish and are buying puts in the process. This ratio needs to go well under the 50 level in order to print a permanent top. In fact, when all retail traders are on the same side of the boat and buying call options, that is when we will see the largest gains. We are nowhere near this point yet.
So selling options or premium against ones positions doesn’t seem the best course of action right here. The S&P500 (NYSE:SPX) will undoubtedly break out to new highs once again pretty soon and shorts will undoubtedly cover which will only add fuel to the fire. Long positions using a trailing stop seems the best course of action here. Furthermore if one wanted to be sector specific, I believe the tech and biotech sectors will easily outperform the market so some capital should definitely be deployed in those areas.