Profitable Option Trading Strategies for Any Market Environment

Here is my top pick: When looking for the most profitable options strategy, do not look at the magnitude of profit. Options allow for potential profit during both volatile times, and when the market is quiet or less volatile. There is, however, a skill in knowing who those amateurs are and what behaviors they exhibit to clue you in on their lack of experience. Well, here it is. I trade a few advanced option strategies here and there, but I make most of my money just sticking with the basics.

The strategies are reasonably simple, requiring a very basic level of technical analysis, and the percentage of winners is much higher (80% or more, with the right trading plan). Overall, the most profitable options strategy is that of selling puts. It is a little limited, in that it works best in an upward market, although even selling ITM puts for very long term contracts (6 months out or more) can make .

Writing Options

Subscribe to RSS Feed. Swing trading options is a concept that I hope you will find helpful and useful! I have filled this site with information that will both stimulate you and help you to broaden and spice up your investment strategy. Part of the proceeds from this website go towards supporting an education programme for underprivileged children in Mongolia.

Access this FREE report before it is too late! Swing Trading with Options: Swing trades are executed within 2 - 10 days. This short time frame is critical to successful option trading. Firstly, because of the huge profit potential.

Secondly, because of the variety of trading strategies available to an options trader, most of which are MUCH safer than stock trading, and all of which are more profitable than just about any other investment vehicle you could name. Here you will learn how to: Match stock trading strategies to an appropriate option trading strategy ; Use a one-step trend analysis strategy applied to selling options e.

Some Basic Essentials before going further: Articles for Newbies What is Option Trading? Most Profitable Options Strategy. Selling Options Selling Options. Buying Options Buying Options. Volatility Trading Strategies Volatility Strategies. How to Trade a Straddle. How to Trade a Strangle. How to Set Up Zulutrade. Product Reviews Trading Pro System. Options contracts are flexible tools that make this possible, though some approaches are as risky and complex as they are versatile.

One way to profit from options in any market, as well as to employ even more sophisticated strategies, is by writing options. When a speculator writes an option contract, he receives a payment from an investor who purchases it. This payment is known as the premium, and the speculator keeps this payment even if the contract right is never exercised. As a result, profitable call options can be written for commodities the speculator believes will trade flat or downward and put options for commodities trading flat or upward.

Writing contracts without an appropriate position in the underlying commodity entails a substantial risk, however. Most stock and option investments involve the purchase of a single security that becomes profitable if the underlying commodity moves in one particular direction, up or down. Instead of hoping for a specific move, a straddle involves buying both a call and a put option at the same strike price and with the same expiration dates. This becomes profitable if the security moves in either direction, as long as it moves enough to cover the premium cost for both contracts.

A straddle may also be written by a speculator if he believes the commodity will trade flat but at a theoretically unlimited risk. At first glance, a strangle appears very much like its brother, the straddle. While both feature the purchase of a put and call option with the same expiration date, the contracts are instead purchased at different strike prices. This enables a speculator to enter the position at a lower cost, as one or both of the contracts may be purchased out of the money, meaning they are not worth exercising at the underlying commodity's current value.

While this is a less expensive position to enter, the strangle also requires more movement in the commodity before it becomes profitable than the comparable straddle strategy. Like the straddle, a strangle may also be written by the speculator, though at similarly great risk. One of the more difficult option strategies to understand is the collar. To create a collar, the speculator first must own the commodity directly. She then writes an out-of-the-money call option and receives a premium for having done so.

Why Swing Trading?

For instance, with the SPDR S&P ETF (NYSEARCA: SPY) trading around $, some traders are making wagers that SPY will move above $ by July options expiration in 49 days. The chance of that happening is %. Basic Option Trading Strategies You Can Use to Make Money Puts and Calls form the basic building blocks of all option trading strategies. Every trade is built using only Call options, only Put options, or a combination of the two. Swing Trading with Options: the Safest and Most Profitable Method for trading with Options. Buying and selling options can be the quickest way to get really to lose a lot of money! Option trading is a thrilling process, and adds spice to your trading portfolio.