Strategies for These Volatile Markets

[cuttshot 11]

I have traded options for a number of years now with various strategies. With the volatility that we are seeing these days I'm curious as to what other options traders are doing. I tend to stick to a small universe of stocks that I consider but am always looking for a new hot name to look at.

 

I have found the best success here lately with trading spreads. Hedging my risk in these up and down markets has helped out.

 

With that being said I would ask the following questions:

 

What stocks are you finding to have good success with in these markets?

 

What strategies are you using in this volatility?

 

Cuttshot

[cuttshot 11]

One of my favorite stocks to trade with options is Apple (AAPL). It had a really nice rally from early March into early May which I played with some call verticals. Price action has been very choppy since the flash crash but I like the way the daily chart is looking. I'm looking to see if it can get a solid close over the swing high at 272.50 or so.

 

If we can get that I'm looking at playing a move to the upside with another vertical call spread. I would be looking for a decent move into earnings. I'm looking at the Aug 270-300 vertical. It's a wide spread and would need the overall market to continue to the upside.

 

For those of you newer to options this trade would be buying the Aug 270 call and selling the 300 call to help finance the trade. Max profit would be the difference between the strikes minus the price paid. Max loss would be the price paid for the spread.

 

Any thoughts on this trade? Any debate on the long call spread opposed to the selling the put spread? Would love to get some options talk going here.

[OptionsMike 10]

One of my favorite strategies is to watch for stocks that are down hard for four or more days, then begin to show signs of stabilitzing or going up. I consider selling-out-of-the- money puts on these. Once in the trade, I put a pre-defined stop loss on the trade. Interestingly, XOM is showing up on my screens this past week as a possible candidate for this put-selling strategy.

 

OptionsMike

Safe Options Trading Income

[cuttshot 11]

OptionsMike it's been a while since I have posted on this thread. I'm curious to hear how your trading has gone over the past few months. I have had a couple of really nice long positions on AAPL since August. Caught most of the move to the upside through most of September and then got on board again on 10/5. I did get out last week to avoid earnings this week.

 

Still having success selling premium? I have been keeping things very simple with ITM calls and puts with the occasional vertical thrown in.

[OptionsMike 10]

Hello Cuttshot,

Yes still selling options in the form of cc's and csp's. Psst two months have been great. Hope your trading is going well.

 

OptionsMike

Safe Options Trading Income