The Trade Setup to Profit from Market Volatility
How quick can economies emerge from the Coronavirus and the corresponding lockdowns?
How much impact will tariffs and a potential trade war have on markets?
The uncertainty in markets is at an all time high as no one can reasonably answer these questions and predict the future price action. Not to mention, it is a U.S. election year. Volatility is still 2.5x its norm as demonstrated by the VIX (INDEXCBOE:VIX). With all of these concerns in markets institutional traders are sitting on the sidelines and markets have adopted a wait-and-see pattern.
Until a vaccine is demonstrated or COVID-19 cases start reliably decreasing globally, markets are unlikely to see a sustained upside period.
To combat this, here are the trade setups Wealthpress Head Trader recommends:
- Iron Condor
An options trading strategy created using 4 options contracts (2 calls and 2 puts) at 4 different strike prices. The goal is to profit from low volatility in a stock to earn profit when the price closes between the middle strike prices at expiration.
2. Bear Call Spread
An options strategy created with the sale of a call option and the purchase of a call option in the same stock at a higher strike price. This strategy generates profits when the underlying stock price stays below the strike price. In this scenario, the spread expires worthless, allowing premiums to be collected upfront.
3. Work-from-Home ETF’s
Watch the full interview to see the momentum stocks Roger has profited over 400 points from and strategies he is using during these unprecedented times.
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