Which Option Strategy will you use?

[Cris76]

Hello Traders,

I have been trading forex for many years and now learning Option Trading and would like your advices.

I have a strategy that allow me to enter the market nearly at the bottom every time.

I have attached a 1D S&P500 and NAS100 chart showing the candle during which I will enter a long trade.

I know this can be profitable as spread betting with correct TP and SL.

However I am interested to know if an Option Strategy used here would be more profitable also with the benefit of not having to deal with the the SL be hit before the uptrend.

As you can see the move upwards can very...how would you catch the profit? Would you set a TP or wait for the expiration? Also this trades happen every 2-3 months.

What I would like to receive is real suggestion of strategy i.e. ITM or OTM...strike price close or far, expiration dates, possible % returns etc.

If you would be able to predict the movement as per the attached (you might have done better then this), how would you use it with option trading?

As I am learning that would be useful.

Thank you

Cris

 

[CBC]

Hi Cris,

Are u trying to trade options based on the dips in the S&P?

 

[Cris76]

Hi Cris,

Are u trying to trade options based on the dips in the S&P?

Yes, that is a possibility. Will it give a good payout?

 

[Bekim]

How long are you typically holding the position for? I would probably say buying the OTM call spread would be your best bet for this type of strategy because the IV is going to be elevated during these dips.

 

[CBC]

Problem is, and its a major problem, is that every trader from here to Mother Russia knows that the market is going to rally after these dips.

Its calculated into the price.

If you go to the CBOE website and pull up a chart for VIX and SPX simultaniously then you will notice that when the SPX dips in price then VIX will spike in price, and the VIX is what prices the options. So the options are expensive at these dips, and when the SPX starts to rise the options drop in value, I don't know the exact figures.

I wouldn't do it, even if I knew the exact points at which the market will swing upwards.

 

[daniel5198]

Hello Traders,

I have been trading forex for many years and now learning Option Trading and would like your advices.

I have a strategy that allow me to enter the market nearly at the bottom every time.

I have attached a 1D S&P500 and NAS100 chart showing the candle during which I will enter a long trade.

I know this can be profitable as spread betting with correct TP and SL.

However I am interested to know if an Option Strategy used here would be more profitable also with the benefit of not having to deal with the the SL be hit before the uptrend.

As you can see the move upwards can very...how would you catch the profit? Would you set a TP or wait for the expiration? Also this trades happen every 2-3 months.

What I would like to receive is real suggestion of strategy i.e. ITM or OTM...strike price close or far, expiration dates, possible % returns etc.

If you would be able to predict the movement as per the attached (you might have done better then this), how would you use it with option trading?

As I am learning that would be useful.

Thank you

Cris

If I could time S&P bottoms as well as you do, I would just buy ES each time I get that signal.