Issue 99: Volatility Tool Points to Profit Target - Masters in Trading Digest

Our Volatility Tool Points to Profit Target

This Tuesday, we will hold our Volatility Visualizer Webinar to Introduce the NEW High Probability Charting Scans for Thinkorswim.

Managing Trades With Volatility Visualizer, our Volatility Visualization Tool

All symbols that have tradable option contracts also have an ‘expected move’ that can be derived from that option's Implied Volatility price.

The expected move is the value of the at-the-money straddle.  If you need some background information on an options straddle watch this 4-minute video:

Let’s walk through two common sense examples:

  1. When options expire in 5 days, it’s fair to assume the expected move is lower than a stock that expires in 555 days.  More time = more potential of movement.
  2. A stock with extremely low volatility would most likely have an expected move much smaller than a stock with high volatility.   More uncertainty = more potential for movement.

Volatility Visualizer (VV) analyzes an options expected move for the week, as well as a stocks expected move for the month.

For our Breakout Trade Scenario – we want names that have busted through weekly ranges but not yet taken out the monthly expected move levels.

Traders should use the Implied Volatility lines found through the VV as key points for support and resistance.

In Friday’s Breakdown session with Pablo Lucena, traders walked through an example in Paypal (PYPL) because this name was seeing lots of Unusual Options Activity on our Options Scanner, but the Volatility Visualizer scanner had also caught the name as a potential breakout trade.

This 10-minute video does a great job of explaining the breakout scans using the Volatility Visualizer scanner, as well as key resistance and support levels trades should be using to manage their options position.

Masters in Trading Digest - Issue 99

Share this post:

Get MIT Digest!

Want FREE actionable trading tips and strategies like the ones you see here 3 times per week?

We're now accepting sign-ups, FREE for a limited time. Register below to join the Digest.

Unsubscribe at any time! Your email address will be used to send you Masters in Trading DIGEST issues.

Heard in our Discord

 

Appreciate the kind words, Michael!

FINAL THOUGHTS

WHAT TO EXPECT IN THE NEXT MIT DIGEST

The next issue will be released on Wednesday. 

Don't forget to register for the training on Tuesday.

Until then, trade smart and always manage your tail risk.

Thanks for reading,
Jonathan Rose

P.S. Our most popular program, Unusual Options Activity, is available now to all digest subscribers for 99% off! Get it now!

Get Masters in Trading Digest FREE!

Want FREE actionable trading tips and strategies like the ones you see here 3 times per week?

We're now accepting sign-ups, FREE for a limited time. Register below to join the Digest.





 






Unsubscribe at any time! Your email address will be used to send you Masters in Trading DIGEST issues.

Share this post: