The 200-Day Simple Moving Average (SMA200) is the average closing price of a stock over the last 200 trading days. It's one of the most widely watched technical indicators on Wall Street — used by institutions, fund managers, and algorithmic systems to determine the long-term trend.
200 trading days is roughly one calendar year. The SMA200 smooths out daily noise and shows where the stock has been, on average, over the past year. It's slow-moving by design — it doesn't react to daily swings.
Selling puts on a stock that's below its SMA200 means you're selling into a downtrend. The probability of assignment increases because the stock is already weak. Conversely, selling puts on stocks above their SMA200 — in a confirmed uptrend — gives you trend as a tailwind.
This is why ThetaLoop's X-Ray uses the SMA200 as a core scoring dimension. Stocks in a bullish regime (above SMA200) receive a higher score. The distance from the SMA200 also matters — a stock 15% above its average is in a strong uptrend, while one barely above it might be on the edge.
Many institutional mandates require stocks to be above their SMA200 before entering positions. It's one of the few technical indicators that's respected across quant funds, fundamental managers, and retail traders alike. Bloomberg terminals default to unadjusted prices for SMA200 calculations — matching the approach ThetaLoop uses.