21 Jun

Don’t Be The “Sucker” In The Market

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In this market environment, traders who missed the entire bounce…

Are trying to chase alpha.

I’ve noticed there have been so many traders placing “bets”…

That probably won’t work to their favor.

To me, that’s just gambling… and being a “sucker” in the market.

Sure, there’s a chance they make money…

But the probabilities just don’t make sense.

Now, there is a way to profit from this — what I call the “bookie” advantage.

Today, I want to give you a taste of what that is… and why traders should think twice before they place an options trade.

 

Think Twice Before You Place An Options Trade

When it comes to trading options, most beginners like to stick with calls and puts…

Mainly buying them.

Sure, buying calls and puts outright limits risk and provides leverage.

However, when it comes to trading options… there are a few key factors to take into account, which can directly affect the price of options.

For example, implied volatility is one of those factors.

If you don’t know what implied volatility is… it’s the market’s view of how much a stock can move over the life of the options.

The higher the implied volatility… the more expensive the options.

Buyers of options need implied volatility to rise… and the stock to move in their favor to make money.

With implied volatility high at these levels… I believe it may be the best time to be a seller of options.

Why?

Sellers benefit from drops in implied volatility… and don’t necessarily need the stock to move in their favor, if they use specific options strategies.

For example, Nikola Corp. (NKLA) has options available to trade.

The stock closed at $65.90 on Friday… and the $35 strike price puts expiring on June 26 closed at $0.40 bid X $0.60 ask.

In other words, the stock would need to drop nearly 50% in a matter of days for those who purchase the puts just to break even.

According to thinkorswim, the probability those options would expire out of the money, or worthless is 91.10%.

To me, that’s a sucker bet.

The thing is, this isn’t just a one-off… 

There are sucker bets out there in the market all over the place.

For example, Apple Inc. (AAPL) closed at $349.72 on Friday…

But the $310 strike price puts were $0.30 bid X $0.51 ask… and that implied a 95.17% of expiring worthless.

Could there be wild moves?

Sure…

But it’s unlikely.

Now, there is a way to take advantage of the “sucker” bets in the market…

With defined risk.

If you want to learn more about the “bookie” advantage, then you’ll want to check out this exclusive training session… as I reveal how I stack the odds to my favor.

 

 

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