Options Trading Strategies To Avoid For 2016 - PowerPoint PPT Presentation

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Options Trading Strategies To Avoid For 2016

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As 2016 approaches, let’s look at some options trading strategies to avoid. – PowerPoint PPT presentation

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Title: Options Trading Strategies To Avoid For 2016


1
  • OPTIONS TRADING

Options Trading Strategies To Avoid For 2016
2
Welcome to Options Trading Research Your premier
site for news and information on Profitable
Options Trading. For more info on Options Trading
visit our website www.OptionsTradingResearch.com
3
  • Get Your Free Report For The Best Options To Buy
    For 2016!
  • Well tell you about this
  • Special Offer
  • at the end of the video!

4
  • Hi, My name is Steve and Im with Options Trading
    Research, today were reviewing our recently
    published article

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  • Options Trading Strategies To Avoid For 2016

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  • Hard to believe but 2016 is right around the
    corner. While the financial markets dont really
    care what calendar year it is, we as investors
    tend to like to group market conditions by the
    year.

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  • For instance, 2015 will most likely be the year
    of tepid growth and higher volatility. It was
    generally sideways trade this past year, except
    for the late August correction and subsequent
    rebound.

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  • So what kind of year will 2016 be? What sorts of
    options strategies are we going to focus on?
    Thats a question for another time. This time
    around, were going to look at what not to do.

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  • So what options trading strategies should we
    avoid?

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  • First take a look at this chart of the SP 500
    SPX over the last year

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  • The chart of the SP 500 shows what I was just
    discussing. The index has mostly been trading in
    a fairly consistent, sideways range. We had the
    big August selloff with the roughly 2 month
    recovery.

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  • Now, it looks like were right back to the range
    from earlier in the year. Given the economic and
    geopolitical conditions worldwide, I believe we
    can expect more sideways action in 2016 with
    occasional bouts of higher volatility.

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  • As such, one of the first things to avoid is
    being overly short volatility. Yes, shorting
    volatility is a time-tested successful options
    strategy. Still, youll need to be more careful
    over the next year than in past years given all
    the variables.

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  • So what other options strategies should we
    consider?

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  • Related to the point above, 2016 could be a good
    year to actually buy options. Now, that doesnt
    mean you should ignore a good income strategy
    like covered calls.

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  • (As a reminder, a covered call trade is selling a
    call against a long stock position. The trade is
    maximized if the stock price is right at the
    short call strike upon expiration. For a
    refresher on covered calls basics, follow the
    link.)

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  • However, strategically buying underpriced calls
    and puts could be a successful strategy this year
    given the added volatility and choppiness. As
    always, youll have to do your homework before
    making any trading decisions.

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  • But, this should be a better year than most to be
    long options. Finally, I would tend to avoid
    bullish strategies on oil and gold. Oils supply
    glut means were not likely going to see a major
    increase in price this year.

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  • And, as long as the dollar is super strong, gold
    isnt going anywhere. Of course, make sure you do
    your research before making any options trades.
    And, dont be afraid to alter your strategies
    when the facts change.

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