Last updated on May 12th, 2020
One of the most challenging times of year to trade is in the summer when markets slow down.
With vacation season in full swing we often times see low volume market movement during July and August. While this can be a frustrating time of year for active traders, using options allow us to control our risk and generate income even in the slow conditions.
As options traders, we make the big returns when markets are making big moves back and forth. Unfortunately, we know the market isn’t always volatile for us. There are certain times of the year when we need to adjust our risk based on market conditions.
We are in one of those times now with markets at all time highs and volumes near all time lows. Markets have been slow the last few weeks and will most likely stay that way through August.
Using options is a great way to get through the summer chop while generating consistent income along the way.
- We can adjust the option strategies that we use to better position ourselves for the slow price action.
- We can use a variety of different options strategies like long calls and puts, long vertical spreads, and credit spreads to take what the market is giving us.
- Instead of forcing the long calls and puts to work in a slow market, we can take advantage of time decay working in our favor with the credit spreads.
All of these combined can lead to more consistency throughout the year.
Option Strategies Help Control Exposure
The best part about using a variety of options strategies in different market conditions is they allow us to keep our risk to a minimum. In the video below we will walk through new setups on TLT (Bond ETF) and QQQ (Nasdaq ETF) using our Options Academy systems.
We will show 3 different ways of taking each trade using the flexibility that options offer. This way we can make sure we are in positions that best reflect the current market conditions.
Take a look at the video below so you can see how we approach the options markets on a daily basis at NetPicks. Feel free to contact me directly with any questions you might have. Mike@netpicks.com.