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Picture an ice cube sitting next to a fire.

When it's far away, the cube barely melts. Move it closer, and the water starts pooling fast. In the final moments, it's gone in seconds.

That's time decay. And right now, one of our trade ideas is watching the ice cube work in its favor while two others are running out of room to recover.

This is the three-week update on those protection-first trades I walked through: One winner. Two struggling…

…And a lesson about structure that most traders learn the hard way.

The Current Numbers
 

Gilead (GILD): The diagonal spread is now worth $6.05 versus the $4.22 entry. Stock sitting at $125. This one is working.

Valero (VLO): The put credit spread collected $6.25. It's now worth $12.94. Stock dropped to $163. This one is bleeding.

ExxonMobil (XOM): The $120 calls are at $2.64 from the $3.77 entry. The $125 calls sit at $1.17 from $1.95. Stock trading at $117. Both underwater.

One clear winner. Two losers. And a massive lesson hiding in the difference.

Why GILD Worked
 

The diagonal structure did exactly what it was designed to do.

We bought the January 16 $120 call for $6.65. We sold the December 26 $126 call for $1.80. Net debit was $4.22. The spread is now worth $6.05.

Here's the ice cube working for us. That short December 26 call melted from $1.80 down to $0.11 as expiration approached. If you bought it back for $0.11, you could sell another weekly call now for around $1.20.

That's positive time decay. You paid 85 cents of extrinsic value on the long call. You collected more than that by selling the short call. The structure pays you to wait.

Healthcare sector continues showing relative strength. XLV held up while technology and energy fell apart. GILD rallied back to $125 and the position is profitable.

The VLO Problem
 

VLO collected $6.25 in premium. The spread is now worth $12.94. Stock dropped to $163 versus our $168.65 break-even.

The ice cube is still working here too. Every day both options lose value. The short $175 put loses faster than the long $140 put. That's positive time decay even on a losing trade.

But time decay cannot overcome a massive move against you.

VLO broke through $170 support and kept falling. The sector rotation out of energy accelerated. Maximum risk on this spread was $2,875. Current loss sits around $6.69 per spread if closed today.

27 days to expiration. If $160 support holds, time decay still has room to help. Break below $160 and you take the loss.

The XOM Reality
 

This one is simpler. Wrong direction, calls underwater, decision time.

The $120 calls dropped from $3.77 to $2.64. Down 30%. The $125 calls fell from $1.95 to $1.17. Down 40%. Stock sitting at $117.

There's no short option here collecting time decay. The ice cube is melting against us. February expiration gives time, but every day that passes without a rally costs money.

My rule is three to 10 days from expiration, I'm bailing no matter what. Or rolling. Anything that moves against me in that window, meaning it closes against me if I'm bullish, I'm looking to get out.

February is still two months away. But holding through continued weakness because you have time remaining is hoping, not trading.

If energy cannot show strength by year-end, close both positions for whatever recovery you can get.

Positive Time Decay Changes Everything
 

Most traders assume long options pay time decay and short options collect it.

Not always true.

If I pay 85 cents of extrinsic value on a long call and collect $1.20 on a short call, I have positive time decay even though I'm long the spread. The structure pays me to wait.

GILD is a positive time decay trade. VLO is a positive time decay trade. Both collect money from the passage of time.

XOM is not. It pays time decay every single day. That's why it needs the stock to move or the position bleeds.

When you build structures that collect time decay, the ice cube melts in your favor. When you buy naked options, you're watching your money pool on the floor.

What Happens Now
 

For GILD, you can take profits or keep the position working. If you bought back the short calls at $0.11, you could sell them again now for $1.20 and continue reducing your cost basis. The diagonal is designed for exactly this scenario.

For VLO, watch $160 support. Stock at $163 now. If $160 holds, time decay continues working. If $160 breaks, make the decision to take the loss and move on.

For XOM, this is a patience test with a deadline. If energy shows no strength by year-end, close both positions. Do not hold losing trades just because time remains on the calendar.

The Broader Picture
 

Technology sold off from fair price. Tax loss harvesting is accelerating into year-end. XLK broke support at $142.93, and a close below that level signals more downside potential to $136.

Healthcare continues holding relative strength. That's why GILD survived while the energy trades struggled.

For new setups, I'm not adding energy exposure here. Healthcare still looks strongest for bullish plays. Basic materials pulled back to fair price and could set up the next move if $44.36 support holds.

This is what real market analysis looks like. Not every idea works. But every idea gets tracked. Every structure gets explained. Every result gets shown.

The ice cube keeps melting. Build trades that make it work for you.

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