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.
Some vertical spreads have the same looking risk profile. There's a reason why that may be the case. Here's an example of a vertical debit and credit spread options trade.
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.
If the markets are crashing, do you close your positions or do you take advantage of opportunities? Whether you are a stock investor, volatility trader, or speculator, there may be a strategy worth pursuing.
The volatility of volatility, or VVIX, could be helpful to add to your Watchlist. VVIX indicates how to create options strategies in VIX options.
Traders may live for momentum but finding it is another story. Gaps, rectangles, flags, head and shoulders, and triple top chart patterns could help you figure out which way prices could move and with how much momentum.
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.
Maybe volatility is low and you believe a breakout is about to happen. But you don’t know which direction price will move. Or maybe you believe the markets are high and you don’t know when they might fall. What options strategies could you trade?
Long call vertical spreads, short put vertical spreads, and call ratio backspreads are defined risk bullish option strategies with relatively low capital requirements that could offer upside potential.
Are you effectively investing your money? Millennials are among the smartest investors, but not all of them follow this important process.
Learn how to spot potential trade candidates by assessing straddle price versus average earnings moves.
How using Kurtosis to study abnormal market behavior—in particular how it explains the price behavior of options—can aid in your strategy selection.
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.
Why trading in high-priced stocks may be no riskier than their low-priced brethren, and how to calculate that risk with implied volatility.
Delta is much more than a one-trick pony. Understanding some other tidbits of info delta provides can help a trader select option strikes.
With IRAs, plenty of stop signs tell you what you can and can’t do with options. Are there workarounds?
Picking months and strikes are big decisions for options traders. Do probabilities matter? We think so.
Option strategies for more potential profit, using undefined-risk trades that draw roots from their defined-risk cousins.
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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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