MTM Options Trader Newsletter | Vertical Spreads Are an Option

[image]( [image] This Week in the Market The major indexes closed pretty much unchanged for the week with small gains or losses. The S&P 500 has been trading in a fairly tight range since mid-September. Obviously, at some point it will break out of that range. With buyers stepping in on most pullbacks, the current bet is it will move out of the range through resistance. Because of that rationale and the strength of the market, a non-bearish outlook continues to make sense. Implied volatility and option prices did rise a tad this past week, but Friday’s rally brought the VIX down a bit to end the week. It is quite the heavy week as far as economic reports go. There are several important releases scheduled, including a couple of inflation numbers, CPI and PPI. Plus, on Wednesday afternoon, the Federal Reserve releases the notes from its last meeting. If that weren’t enough, there is at least one Fed member expected to talk Monday through Friday. In addition, several financial institutions are set to release their latest numbers toward the close of the week. Buckle up because it may be another bumpy ride for the market. Have a safe, healthy and profitable weekend! Oct 7: Consumer Credit Oct 8: U.S. Trade Deficit Oct 9: Wholesale Inventories Oct 9: FOMC Minutes Oct 10: Jobless Claims Oct 10: Consumer Price Index Oct 11: Producer Price Index Oct 11: Consumer Sentiment [Read Our Blog]( Vertical Spreads Are an Option Although most option traders do not live on buying calls and puts alone, they often forget to look at vertical debit spreads as well. Too many times they go straight for a vertical credit spread. By no means am I implying not to trade vertical credit spreads, but I believe too many traders automatically default to them even when there is a directional bias. A Quick Example Let’s say an option trader believes ABC stock will rally over the next month or so. The stock is currently trading at $52. He or she could buy the October 50 call for 5.50. But what if the [Continue Reading …]( MTM Watchlist Here are a few trade ideas we will most likely look at in MTM’s group coaching class this week: SPY – A double calendar did exceptionally well last week. Expect another one or two to be explored this week as well. NVDA – The stock continues to give us multiple opportunities to extract money. More calendars and vertical credits will be modeled out. BA – The stock has been sliding lower for several weeks and the downtrend remains intact. More bear call spreads will be analyzed this week. [image]() The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by emailing investorservices@theocc .com; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2024. All rights reserved. Reproducing or redistributing this content is a violation of federal law. [image] If you do not wish to be contacted via email, you can unsubscribe using this link: [Unsubscribe]( Unsubscribing from email notifications DOES NOT cancel your class, subscription or recurring payments. We recommend that current students do not unsubscribe from email notifications. If you unsubscribe from email notifications, you will not be notified on how to access the classes or subscriptions in which you are enrolled. Market Taker Mentoring, Inc. PO Box 117 Frankfort, Illinois 60423 United States