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Can We Expect the Volatility to Get Worse?

Can We Expect the Volatility to Get Worse?

Posted On October 15, 2020 2:44 pm
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These last couple of weeks have been a roller coaster ride in the market.  We’ve seen huge swings based solely on news, announcements, or tweets…

And as the election gets closer you can expect more of the same. 

Election years are always volatile, however with the resurgence of Covid, the apparent lack of a stimulus package deal, the uncertainty about who will be elected, and stock valuations already in the stratosphere…

Right now is NOT the time to play “Herro Ball!” (Yes I am a basketball fan.)

The right way to trade this market is selectively, defensively, and carefully. 

Sometimes you can just buy anything and make money.  That’s mostly during a strong bull market or as the market crashes.  

For example, during the crash in March, you could buy almost any put contract and sell it a few days later for a profit. 

That isn’t because people were doing a great job at choosing put contracts to buy, it was because the market was crashing!

It was hyper-directional, so making money was easy.

That’s not the situation we are in right now…

Right now, the market could turn on a dime, or on a tweet.

That kind of uncertainty requires caution, which is why we are being even more selective than normal in Options360.  

I am always careful in choosing the positions I recommend, and I never leave readers open in a naked position.

But right now I am even more defensive, even more selective, even more careful.

That’s how we make money in this kind of market.  We grind it out, and when the market finally chooses a firm direction again – we will be here ready and waiting to cash in big.  

To Your Success,

Steve

P.S. If you have not yet claimed your $19 trial membership to Options360, do it now.  I have some critical training webinars planned for this month, and you get access to them with your trial membership.  

 

Click here and take me for a test drive today!

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About author

Steve Smith
Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.

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