There's no way to predict bear markets. Each one is different from the next. But these options trading strategies can prepare you for unexpected market events.
Vertical spreads are a common choice for options traders looking for a flexible defined-risk strategy. But how do you choose among strategies? Here's a handy checklist to follow.
Trend direction and volatility are two variables an option trader relies on. Combining trend following, momentum, and trend reversal indicators on the thinkorswim platform may help you determine which direction prices may be moving and with how much momentum.
Traders sometimes talk glowingly about thrilling options trading strategies without considering the risks. There are some alternative strategies such as short out-of-the-money verticals that you could consider to better manage your risks.
When developing an options trading strategy, you might consider whether a trade is risk-defined, has positive theta, and is "high probability".
Learn how to spot potential trade candidates by assessing straddle price versus average earnings moves.
Overtrading can be a killer to your P/L. The trick is to trade
consistently and always know what the markets—and your positions—are doing.
You can upgrade your trader status by expanding your leverage with portfolio margin, but first you must know synthetic equivalents—here's a primer.
The greeks option traders use are loved by many, but understood by few. Know the false “truths” about option greeks to better manage your trades.
A trader's job can be easier than an average mutual fund manager's—A few reasons the playing field for traders is more than leveled.
Today’s obsession with the “short term” has created a new paradigm for “long-term” investing. It might help to put a trading spin on the long-term view.
thrive on volatility. So when dull markets
are a drag on your P/L, don’t wait for the
market to come to you—go after its components.
In geek-speak, welcome to volatility
With IRAs, plenty of stop signs tell you what you can and can’t do with options. Are there workarounds?
If the quants are making all the money these days with high-frequency trading, what’s it gonna take to compete? Beat them at their own game.
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Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.
Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
Market volatility, volume, and system availability may delay account access and trade executions.
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