David Reese - Options Trading Playbook: Intermediate Guide to the Best Trading Strategies & Setups for Profiting in Stocks, Forex, Futures, Binary, and ETF Options

Options Trading Playbook 2020

Intermediate Guide to the Best Trading Strategies & Setups for Profiting in Stocks, Forex, Futures, Binary, and ETF Options; Build up a Remarkable Passive Income in a Matter of Weeks.

By

David Reese

Copyright 2020 by David Reese - All rights reserved.

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Introduction to Intermediate Trading Strategies

A fter having mastered the basics of options trading strategies, you want to advance your skills and trade at the intermediate level. At this stage, you will engage in real-time trading. To do this successfully, you will need to learn about the mechanics of trades.

As we have already determined, options trading can be extremely lucrative for traders of all account sizes and skill levels. This is because of the huge leverage that options strategies offer. These strategies lead to very large returns in a very short period of time.

A lot of options traders often start out by purchasing bullish call options. Such an approach can be profitable. However, this is only a scratch on the surface. There are trading strategies that can lead to much higher profits within a shorter period of time. It is at this point, where you apply multiple trading strategies, the trading gets interesting.

Intermediate Options Trading Strategies

Intermediate strategies open your mind and opportunities to earn more money regardless of the different conditions of the market. As a beginner, you already know that directional investments such as buying put and call options are great ways of getting started in trading options. Such strategies are great but can only make you so much money. You need to learn some strategies that can earn you even better returns.

As an intermediate trader, you should learn how to benefit from volatility. Volatility needs to be your friend and partner as you can benefit from sharp and sudden movements in the markets. Options are mostly affected by implied volatility which is essentially the most crucial factor affecting options prices. You need to learn to be on the lookout for implied volatility and determine whether it is low or high. This way, you will easily be able to get a sense of direction regarding the type of options to engage with.

When implied volatility is high, then it is advisable to use selling strategies such as iron condors and vertical spreads in order to sell premiums. Such strategies are well suited to benefiting from any drop in implied volatility down to normal levels. However, when the volatility levels are low, then it is advisable to buy more vertical spreads and generally purchasing long puts and long calls. This approach will enable you to benefit from movements in volatility. You can also benefit from selling premiums as you are able to benefit from time decay.

Sideways market movement

If you want to trade options successfully, then you need to identify the strategies that will enable you to benefit should the markets move sideways rather than upwards or downwards. Certain strategies will enable you to benefit from such strategies.

Most traders dislike this market condition because they like the knowledge of strategies they can implement to benefit them. Yet as a seasoned trader, you need to actually have strategies that can ensure you are profitable in such circumstances. Using options, it is possible to make money even with almost zero movements in the markets.

Most of the time traders consider selling premiums when there is no movement. You can use options to achieve this effectively. For instance, strategies such as calendar spreads and iron condor are effective in sideways market movements. Others include the sale of strangles, straddles, and vertical spreads.

Reading an options table

Some of the crucial things that you need to learn include how to read an options table. As it is, the values of options are determined by a number of factors including the distance between market valuation and contract initiation and the strike price, volatility of asset price, time till expiration, and others. Greeks are created by models that are the values determining the relationship between an underlying asset and the option price. It is these relationships that make options tables valid.

You will find out that a lot of the time, the markets attention is often focused on options trading. If you learn how to read the table properly, you should then apply your skills on paper before then applying your skills and techniques to actual or demo trading. Make sure that you engage in demo trading before live trading using real money. When you apply your skills and techniques on a virtual trading platform, you will successfully be able to apply these same techniques to other situations on the live trading platform.

Acquire as much experience as you can

Basically, the more you trade in options, the better you become. You improve your skills and gain more exposure to different trading conditions. As such, you gain the necessary techniques and knowledge that help to make you a better trader. For instance, you will get to learn about certain techniques that can save you money. A good example is placing entries right between the bid and ask spread. This will not guarantee an instant fill, but you will be able to save a significant amount of cash by doing so.

Options trading is an incredibly powerful investment strategy. By learning some of these powerful trading strategies and tips, you will be able to make plenty more money from your trades and benefit from all kinds of market conditions.