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Options Course

 

 

SINGLE LEG OPTIONS TRADING (PUTS/BEARISH)

Single leg options simply means that you're only using one option to make your trade, you're not combining two contracts for the trade. This should make sense to you after you've completed the course.

1. Watch SPY chart and understand its direction for the day

SPY represents the market, meaning that you'd want to also understand overall market conditions to make successful trades.
Ask yourself:
Is there any significant news driving the market up and down?
Is the market overbought or oversold?
Is the volume pushing for bullish or bearish moves?

2. Based on the first question, you've now decided whether the market is bullish or bearish for the day.

My next move here is to trade WITH the trend. Why? Because the trend is your friend.

Check out the next image to see exactly what I mean:

Important: The following image represents a BEARISH trade. Meaning you'd buy option PUTS.