By: Tom Gentile
on December 6th, 2021
The Stock Market to Start the Week
If this week is anything like last week, we need to keep our seatbelt buckled as the roller coaster ups and downs will continue.
Should things settle down and we get more clarity on how much of a concern is needed regarding the omicron virus and the markets absorb that with a positive view volatility should settle down and options implied volatility should come down and bring us more reasonable prices for options.
Smart Approach to Trading Options on Stocks
I will favor getting back to more options buying (buying to open option trades) once Implied Volatility comes back down.
Therefor I want to look at options with Cheap IV.
Not only do I want to search up stocks whose IV is cheap, but I want to see if any of them are trading at or better yet, off a price support. One other thing I look at to find stocks with a propensity to go higher is the Money Calendar. I like stocks with Cheap IV and a high probability bullish pattern.
Stock Market – Will the Bull Market Resume?
Not only would I like to find stocks bouncing off price support to then pursue options trades, but I would also feel more confident in doing so seeing the Dow, NASDAQ and S&P500 doing the same.