Last week, we talked a lot about how to trade earnings season.
A huge part of that is understanding volatility.
Volatility is the juice that our trades need to make money.
Markets with high overall volatility, as measured by the CBOE Volatility Index (VIX), offer traders more opportunities, as more stocks are likely to move (up or down).
What’s more, individual stocks with high implied volatility have an even better chance of moving up or down.
As I told you last week – volatility is starting to tick up.
We’re seeing some shakiness in stocks… a strong dollar… gold powering higher… tons of action in the crypto market…
In fact, as of this writing, the VIX index is up 30% from its recent lows.
Now, that could be due to a number of factors:
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The attempted assassination of former President Donald Trump
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President Joe Biden dropping out of the 2024 election
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Seasonal bearishness in stocks (as predicted by Money Calendar)
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Earnings season
Volatility tends to spike during periods of market bearishness…
It also spikes during earnings season…
And it spikes during periods of uncertainty, war, and geopolitical tensions – all of which we’re seeing right now.
Now, while we love volatility as traders, it does present a bit of a problem, at least if you’re an options buyer…
The Cost of High Volatility
Remember, implied volatility – which is a measurement of how likely the market thinks it is that a specific security will move – puts pressure on options prices.
That’s because the rights to exercise an option contract become more valuable during periods of high implied volatility.
The higher the volatility, the better chance the underlying will hit the strike price of the option.
And that makes options contracts much more expensive, putting options buyers at a disadvantage.
But I’ve developed a sure-fire way to find the cheapest options in the market.
So today, I’m going to show you the top 10 cheapest options according to my scan – and exactly how I found them.
In fact, I recorded a special video for you showing you the cheapest options you can find in the market right now.
But before I share what I found, I want to make clear what I mean by “cheap” options – because I’m not talking about price.
Every day the markets are open, you can buy wildly out-of-the-money options for next to nothing. Heck, right now, you can buy options contracts on the best stocks for a dime, a nickel, even a penny (on a per-share basis).
They don’t cost much, sure… but they also aren’t worth much, either.
And come expiration, they’re going to be completely worthless.
So I’m not talking about “cheap” in terms of cost. I’m talking about cheap relative to their volatility.
If that sounds complicated, it’s not. I’ll explain everything in today’s video – and I’ll give you the top 10 cheapest options right now…
So click below to get started now…
Good trading,
Tom Gentile
America’s Pattern Trader