Stock Market Volatility: December 3rd, 2021

I spoke about this already, but it is such an important thing to deal with and discuss let me continue to give my perspective about the stock market volatility.

I am an options trader through and through. I have long-term investments, sure, but I focus my time primarily on trading options and teaching others how I go about my processes.

I do pay attention to the longer-term when it comes to my trade ideas for Selling Puts to either keep the sold premium or take assignment of stocks at prices I agree to and like with my Rocket Wealth publication, but most other options strategies are usually less than 45 days to expiration or less.

Stock Market Volatility

I was expecting a low volume, low volatility day the Friday after Thanksgiving beings it was a half day of trade and more investors and traders than usual were not going to be around (taking that holiday and turning it into an extended weekend).

Then the news of a new Covid variant called omicron gets reported out of South Africa and the markets, specifically the Dow, even on lower-than-normal volume drops 1,000 points that day.

Then the daily news headlines start hitting us. Early reports are the symptoms were deemed mild compared to Covid, then they are reported at risk of being more severe, then Chairman Powell says the risks of this variant could disrupt things and they may need to accelerate their tapering, then the jobs reports may help smooth things over and on and on…

What is an Options Trader to do?

I look at these two lists either at the end of the week or at the beginning to get a big picture view of options trader activity. I then look to see if any others of these securities are on other lists to filter down which security and which options strategy to research further.

—Tom Gentile