Trade Aptitude

Today’s Best S&P Futures Turning Points: Nothing tradeable today.  

Tuesday’s results: This strategy is on hold... but is improving and likely out of the drawdown soon.

The World Index: (+100/-100) dumps from -14 to -64 with all major world markets Bearish on rising volatility. 

Catalysts: MFG & Services Flash PMI @ 9:45. New Home Sales @ 10:00. Crude Inventories @ 10:30. Bearish hangover from GOOG/TSLA earnings. 

Quick Tip: Expensive Options

Traders going long want (need) to buy low and sell high. What may be more important, if available, is a clue that something non-publicly known is about to happen forcing the stock to rise quickly. This might be an earnings release, new product, acquisition, etc. The idea is that smart money knows something the public doesn’t and trades that information. 

Following smart money buys in the options market has edge. You want this. The obvious question is how do you find them? 

Larry McMillan, in his excellent book Options as a Strategic Investment, explains one clue: 

1. Options suddenly become very expensive.

2. Stock price movement is strong. 

3. Stock volume is strong. 

Not every occurrence will be a winning trade, but those are the ground rules for considering the trade. Our Swing Trading team adds to this by identifying truly unusual options trades. These are setups with considerable evidence from thousands of trades. We use a tool that makes this incredibly easy. Watch the demo here. No disappointments!

Trade Fearlessly,

Mike Siewruk

P.S.  Feel free to pass this along to your trading buddies. Share in the wealth!