There is divergence in the force... the market that is. Looking at the 3 major indexes - the SPX, RUT, and QQQ - the weakest index has become the strongest and the strongest the weakest. One thing that we have been harping on is historical volatility vs. implied volatility. Everybody wants to be premium sellers including us at TheoTrade. However, we have a shift in dynamics that traders need to be aware of or they will be run over by the market. When historical volatility exceeds implied volatility the juice isn't worth the squeeze. This is a rare time in the market when you want to be long gamma (AKA an option buyer). TheoTraders buy options the smart way though through debit spreads. We recommend In Out Spreads in today's market. Let's dive in...
2 Comments
Raymond
July 9, 2016Spectacular heads up warning.
Bruce Kapp
July 9, 2016Mr. Kaufman:
I just want to thank you for your daily educational videos and other materials you work hard to share with us. I am learning a lot and am really attracted to your high probability philosophy and that you stress success over greed. I really like your approach. And your $97 3-video course that I purchased is great. I have watched it several times and need to watch it several more times and I will.
Thanks again,
Bruce Kapp