Using Options To Play This Shifty Market

2021-11-16

What strategy allows Simpler’s traders to track market moves in any direction?

The option trade can follow moves up, down, or sideways — in any market condition. Options can deliver setups for playing the market to the long or short side and within a choppy market like recent conditions. Options strategies also offer a variety of expanded setups.

A key difference between options trades and purchasing a stock is the expiration date. Stock ownership has no expiration date, whereas options always expire.

Stock trades are directional where investors and traders tend to focus on buying or selling. Purchasing stocks can require larger capital due to individual stock prices  and buyers tend to hold onto these assets for longer periods of time.

Option traders can have lower capital requirements and can utilize expiration dates to their advantage. Options allow traders the right to buy or sell at a set price. Common options strategies include spreads, butterflies, and condors.

There is an important caution for options — options open up the potential to make large gains, or take large losses, from a small initial investment. Traders should consider their personal level of risk management.

Traders with little or no experience are initially not allowed to trade options on trading platforms. Having an understanding of patterns, asset classes, risk, support and resistance and market conditions are all critical to establishing an options trading account.

Many of the traders on Simpler’s team have used options trading to grow their smaller accounts while learning the potential and risk of trading. The leverage of options trading presents an opportunity for traders to grow accounts while maintaining the principal investment.

What have all the traders at Simpler discovered about options trading?

Having a mentor can shorten the learning curve for this powerful trading strategy. Simpler Trading has a team with decades of real-time trading experience.

Why not learn from a community of like-minded traders who continually work to improve their trading skills and share with others?