For options trading, especially in a trending market, there is a real need for a certain ** and flexible operation.
Although 70% of the time in the capital market is in the market, and the market does provide some opportunities to make money, but when the trend appears, if you don't grasp it and miss it, the psychological discomfort will be more uncomfortable than being trapped. Because trends are often good opportunities for small and medium-sized investors to achieve big gains. In a bull market, it is very likely to make a profit even blindly. Trading with the trend means being able to make a steady profit when the market is trending well. There is a good saying: "Investment is three points, seven points operation." ”
Option sauce collated and released.
Options trading, especially strategies used to follow trends, are often somewhat aggressive rather than defensive. This strategy may be a one-legged buyer, a two-legged strategy (buyer + seller, if bullish ** can use **call + sell put), or even a three-legged strategy (1 buyer + 2 sellers, such as bullish ***call + sell deep out-of-the-money call + sell put).
First of all, the single-legged buyer strategy is adopted in the future. For example, if the underlying asset is from 50** to 55, you can buy a call option of 55 with a premium of $10. Once the ** exceeds 55, you will be able to realize a certain profit, and then buy the option with a higher strike price again according to the **. Such a strategy takes full advantage of the fact that gamma is maximized around parity, resulting in rapid premium growth. With this relay operation, you can lock in the previous profits even if you follow up.
The two-legged strategy is more aggressive. In a call, in addition to the call, you will also sell a put, forming a long position. Such a strategy has greater potential gains at ***, but it also comes with *** risks. In order to get a larger safety cushion, it is advisable to sell the out-of-the-money put. In this way, by charging time value, directional losses can be compensated to a certain extent. You can also combine calendar spreads, such as selling near-month out-of-the-money put+**far-month call, to take advantage of changes in time value.
The flexibility of options can require different strategies in different market characteristics. For different**, choose different instruments to get a whole new trading experience. In the future, when more options may appear, investors can respond more calmly to different market conditions.