Where to Hunt for Options Trades: 3 Financial News Stories

Tom Gentile

Posted in
Daily Report

By: Tom Gentile
April 3rd, 2023

4 mins read

When starting out ones trading day, the question is usually where to I start looking for options trading ideas?

My team and I contest it should be the Morning Reports Lists in my tools www.tomsoptiontools.com/

It has 6 lists each with their own unique classification and 10 stocks that meet that classification.

Even with those 6 list and the corresponding options one still has to decide which of those options they will pursue.

Its at that point one can realize tuning in to the financial news outlets, TV, internet, print or all there are news stories happening in the markets overall, certain sector news and within those sectors individual stock news.

3 News Stories Happening Today that Could Be Where You go for Option Trade Ideas

All of these may have more specific education and commentary coming on them this week as we may want to dive deeper in to the story and flush out what action we want to take, if any, due to the story.

1) April is the best performing month over the past 16 years

If the data from CNBC is remembered correctly April over the past 15+ years has seen an average increase of 1.9% for the month. This is a more broad-based item that speaks to overall market performance and doesn’t home in on one specific sector or stock, but if you were wondering if you should lean bullish or bearish this piece of data may help you make your determination.

2) OPEC+ Surprise Output Cuts

If you have been studying my work and what I have been educating for years you would have heard and know by now my teaching that we are in a seasonally bullish pattern for oil.  The pattern is highlighted by the ETF USO and that 75% of the time the past 16 years it has trade higher from mid-Feb. to mid-July.

It got off to a slow start this year, having slid back since mid-Feb, but with the surprise cut made by OPEC+ the ETF and many other oil ETF’s and individual stocks are seeing a really nice bullish pop today.

3) Housing Numbers

Nationally, Home prices rose 0.16% in February.  We are seeing the strongest one-month gain since May of last year. This is the first time in 7 months that home prices have seen an increase.


There is more to each of these stories.

It is not the point of this article to do a deep dive into any one of these and make a case for putting ones money to work in any of them.

The point is to say a process for all when deciding where to look and what options to search up starts with the Morning Reports and checking the news stories and seeing if there is any options activity in the Morning Reports lists corresponding to the news from that sector or from any specific stock news.

Sector Analysis

A website we like to use in our research is www.sectorspdr.com.

Figure 1: www.sectorspdr.com Sector Tracker
Figure 1: www.sectorspdr.com Sector Tracker

SPY

Figure 2: 100-day Candle Chart SPY
Figure 2: 100-day Candle Chart SPY

XLE

Figure 3: 100-day Candle Chart XLE
Figure 3: 100-day Candle Chart XLE

XLRE

Figure 4: 100-day Candle Chart XLRE
Figure 4: 100-day Candle Chart XLRE

There are other ETF’s for these sectors, but these are the ones from the site we use.

If you see news that you feel should drive the sector / ETF / Stock higher, but the chart reads like it is in a downtrend and that confusion or the fact the news and the trend don’t match you either trade based on an anticipation of what the chart will do off the news OR…

One waits for the chart to trend more commensurate with the news and when you get more in a situation where the news and the chart coincide or match maybe that breeds confidence in options trades as the Morning Reports show.

App: Toms Option Tools

Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.

Other times I will have other charts may work to amplify my educational points. 

Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.

Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.


Disclaimers

Stock and options trading has large potential rewards, but also large potential risk.

You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.

This is neither an offer to buy/sell/ or recommend a particular stock or option.

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

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