Volatile option strategies
The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor. Such access and use are at all times subject to i The Terms of Use; ii Full Disclaimer; iii The Risk Warning; iv the Rules of Engagement and v Notices applying to Tradingfloor.
Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision.
As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor. When trading through Tradingfloor. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers: Private Institutional Saxo Academy Tradingfloor Log in Sign up now. TEST YOUR TRADING SKILLS. CFD Equities Contract Options. G10 Europe North America United States Germany. Finance Investments Market News and Updates Securities Analysis Technical Analysis. Video From the Floor: Oil tumbles, risk-off spreads across markets SaxoStrats A further slide in oil prices has driven risk-off sentiment across equity, currency and fixed-income markets.
The selloff in oil and other commodities has hit Australian mining and energy shares hard, and the widespread risk-aversion puts the focus on currency pairs such as EURJPY.
Recommend Recommend Comment Share. Options strategies attractive in a high-volatility environment Last week saw the VIX rise to levels last seen in the crisis Volatility remains elevated on Chinese demand fears, US rate speculation.
Markets are reacting to volatility in Chinese equities. When markets get volatile , traders must adjust. From a risk management perspective, this means trading with reduced size and wider stop-loss and profit target levels.
Increased volatility, however, also means that strategies must be changed; in particular, a few options strategies become much more attractive to use, if applied the correct way.
Options premiums rise as the implied volatility in options rise. Implied volatility tends to rise due to investor nervousness about the unknown, i. The CBOE Volatility Index VIX. Create your own charts with Saxo Trader click here to learn more.
Volatile Options Strategies by simyviqoj.web.fc2.com
One simple but powerful fact in the world of options is that the majority of options held to expiration expire worthless, i. Unfortunately, a great many investors are net buyers of options premium, which stacks the odds of making money against them over time.
Smart options players understand that options are a wasting asset and that taking the other side of the masses, i. Just because the odds favour the seller of options premium, however, does not automatically make it a consistently profitable strategy. So, where is the right spot to sell options premium? When markets turn more volatile, not only does the implied volatility of options rise — which option premium sellers like — but markets also tend to reach better extreme points of support and resistance.
Access to this page has been denied.
And therein lies the opportunity. Traders noticed the following: Last week's spike in the VIX plunged global trading floors into chaos. By selling puts or put spreads, investors could profit from the big spike in implied volatility by selling options for an unusually juicy premium.
So, the next time the markets you focus on reach extremes, coupled with a big spike in implied volatility, consider selling out of the money put spreads if the market drops to bearish extremes or selling out of the money call spreads if the market rallies to bullish extremes.
Follow Serge or post your comment below to engage with Saxo Bank's social trading platform. Relevant articles for you. Copyright Saxobank Ansvarsfraskrivelse Risikoadvarsel Persondatapolitik Cookiepolitik Finanstilsynet Klager. Disclaimer The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.
Check your inbox for a mail from us to fully activate your profile.
Have us re-send your verification mail.