In today’s Option Strategy we’ll run through a trading plan for the next day. While the market has moved in a strong downtrend today, a number of stocks are demonstrating the kind of weakness we might be able to cash in on through options.
This will introduce us to a diversified option strategy instead of a single stock or index focus. Right now, remember that option premiums are very low with a volatility expectation that is just 18%, and going short options involves considerable risk, both through adverse reversals of the trend, or through an increase in time value due to an increase in volatility expectations.
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