Dan Passarelli, CEO - Market Taker Mentoring 

I'm often asked how to trade rangebound stocks. As a long-term stock investor, rangebound stocks are kind of a dud. they go up and you make money, they go down and you lose money. Not very successful trading.

But with option trading, there are option trader strategies that can work well with rangebound stocks. There are basically two ways one can think about these trading setups.

First, from a bounce off support or resistance. If the stock bounces off support, a trader can buy a call, to play the rally. If a stock hits resistance and the stock pulls back, a put buying strategy would be the play.

But when implied volatility comes into play, there may be some option strategies that make more sense. Watch this video to learn more about trading rangebound stocks.