Options Trading Strategies When Your Stock Is Down 5%

1

• OPTIONS TRADING

Options Trading Strategies When Your Stock Is
Down 5
2
Welcome to Options Trading Research Your premier
site for news and information on Profitable
Options Trading. For more info on Options Trading
visit our website www.OptionsTradingResearch.com
3

• Get Your Free Report For The Best Options To Buy
  For 2016!
• Well tell you about this
• Special Offer
• at the end of the video!

4

• Hi, My name is Steve and Im with Options Trading
  Research, today were reviewing our recently
  published article

5

• Options Trading Strategies When Your Stock Is
  Down 5

6

• Market volatility has picked up considerably
  since the stock correction from late August. The
  VIX, a popular method of measuring market
  volatility, has been trading above 20 for well
  over a month.

7

• In comparison, the 200-day moving average is
  around 16. Were essentially seeing volatility
  levels more common in a bear market. Does that
  mean were in a bear market?

8

• Its hard to say for sure, but the economic data
  dont support it at this time. Regardless, there
  have been several big down days lately. And,
  there are plenty of stocks which have dropped 5
  in a week, or even a day.

9

• Obviously, if youre long the stocks that have
  been dropping like lead weights, youre not a
  happy camper. Fortunately though, options can
  help you reduce significant downside risk.

10

• And in some cases, you may even be able to profit
  from the situation. Ill get back to that in a
  minute, first a quick aside

11

• For those of you with a deeper interest in
  options volatility, Ive often written in the
  past about volatility and options trading. Feel
  free to check out this article to learn more
  about why volatility is important.

12

• Okay, so what options trading strategies can help
  you salvage your portfolio?

13

• Lets look at an example of a stock thats
  dropped over 5 in a week. Heres Bank of
  America (BAC)

14
(No Transcript)
15

• As you can see, the August correction took its
  toll on BAC. It dropped about 15 in just a
  couple days. Most likely, if you owned the stock
  during this tumultuous period, you were concerned
  about the performance.

16

• However, that doesnt mean BAC is a bad stock.
  On the contrary, its a generally a good company
  which only dropped because of market conditions.
  It wasnt anything stock specific. So the
  question is, now what?

17

• Thats were options come in.

18

• There are several options trading strategies
  which you can use when your stock is down big.
  Some are more geared towards risk reduction,
  while others are meant to help recover lost gains.

19

• For example, buying puts is a straightforward way
  to hedge your stock from further downside. Put
  buying is a peace of mind trade meant to help you
  sleep better at night.

20

• Conversely, you can buy calls if you think your
  stock is going to go back in the relatively near
  future. Essentially, call buying will help
  amplify your returns on the way up.

21

• Of course, you could buy both puts and calls if
  you think the stock is going to move but are not
  sure what the direction is going to be.
  Straddles and strangles both can serve the
  purpose in this case.

22

• On the sell side of things, both calls and puts
  can once again be used. If you feel your stock
  has gone about as far down as its going to go,
  you can sell puts below the current price.

23

• These puts can help generate a yield which will
  serve to build back gains over time even if the
  stock doesnt move for awhile.

24

• If the stock does drop below the short put
  strike, youll be on the hook for more shares
  but that may be a good thing if youre in for the
  long haul.

25

• On the other hand, you can sell calls against
  your long stock and create a covered call
  situation. In this scenario, you earn a
  yield-like return on your short calls if your
  stock is neutral, while making

26

• additional money as the stock rises towards your
  call strike. The calls also provide some cushion
  to the downside. So there you have it. Thats
  several ways to utilize options trading
  strategies if your stock drops 5 or more.

27

• Options make it easy to mix and match your goals
  and risk tolerance and find the best fit for
  almost any situation.

28

• Want More from Options Trading Research.com?
• Follow us on Social Media

29

• Want more FREE information on Options Trading?
• OptionsTradingResearch.com

DOWNLOAD NOW!
30
READ THIS FREE REPORT!
The Best Options To Buy Right Now!