Find out the most important options trading takeaways and lessons to improve your probability of success!
See more videos from the Market Measures Series: http://ow.ly/GBCqz
Now that the end of the year is upon us, we thought it would be a good idea to take a step back and review some of the most popular Market Measures of 2014. Not only are these some of the most viewed segments, they also highlight a number of our main trading strategies. Tom Sosnoff and Tony Battista will be covering why we sell premium, two of our favorite strategies (Strangles and Straddles) and how we can defend these strategies by rolling the trade.
First, the guys look at a great study of why we sell premium instead of buying it. Tom and Tony explain how Implied Volatility (IV) is often overstated. This provides selling premium with an edge over buying it. By this we mean that we are able to sell premium that is overpriced compared to the move that the underlying will actually see.
Next, Tom and Tony look at two very popular strategies, Strangles and Straddles. They compare the two using a number of metrics including total profit and return on capital. This is very important because we always want to use our capital as efficiently as possible. The guys take the study one step further and show the results of both strategies when they are placed in High IV compared with their results in Low IV.
Finally, Tom and Tony cover how they would defend a Strangle that has been tested. Traditional position management would suggest defending the tested side of a position. However, we have found that it is more beneficial to roll the untested side in order to bring in additional credit and extend our breakeven points. The guys show this by comparing 4 different rolling strategies and proving that rolling the untested side is the most beneficial.
It's not always easy to take the measure of a market, whether you've been trading for a day or a decade. On this segment we look under the hood—options probabilities, volatility, trading strategies, futures, you name it—so your trading mechanics are built to manage more winners.
You can watch a new Market Measures episode live and check out all previous episodes everyday at http://ow.ly/EoyGW!
======== tastytrade.com ========
Finally a financial network for traders, built by traders. Hosted by Tom Sosnoff and Tony Battista tastytrade is a real financial network with 8 hours of live programming five days a week during market hours. Tune in and learn how to trade options successfully and make the most of your investments! http://goo.gl/EaF69C
Subscribe to our YouTube channel: http://ow.ly/EbyTn
Watch tastytrade LIVE daily Monday-Friday 7am-3:15pmCT: http://ow.ly/EbzUU
Download our mobile app, Bob the Trader: (ow.ly shortened link)
Follow tastytrade on Twitter: https://twitter.com/tastytrade
Become a fan of tastytrade on Facebook: https://www.facebook.com/tastytrade
Follow tastytrade on LinkedIn: http://www.linkedin.com/company/tastytrade
Follow tastytrade on Instagram: http://instagram.com/tastytrade
Follow tastytrade on Pinterest: http://www.pinterest.com/tastytrade/