Dan Passarelli, CEO - Market Taker Mentoring

Many option traders have a tough time trading straddles. They can be a challenge. And many traders simply can't make them work. In this video I will share the key to how to trade straddles, so you can simplify it for yourself and enjoy more success trading them. Straddles success depends on volatility. In the context of options, there are two distinct types of volatility: implied volatility and historical volatility. Both are important in straddle trading. While many option traders focus only on needing the stock to move, i.e., historical volatility, buying straddles for value means traders must focus on implied volatility as well. We need to find under-priced straddles.

Dan Passarelli, CEO - Market Taker Mentoring

There was a key moving average crossover in the market today in the S&P500. The SPY ETF crossed above the 20-day moving average. Because the 20-day MA represents the trading for roughly a 1-month period, that is a key market strength indicator that often leads to follow through continuing in the same direction. This is not necessarily a market reversal predication. But more of a short-term trading potential opportunity. After several weeks of the US stock market trading lower on the week, there's a reasonably good chance the market may end up trading higher on the week this week.

Dan Passarelli, CEO - Market Taker Mentoring

So-called meme stocks have struggled a little lately. Though there have been some good opportunities for some great option trades on a few lately. The overall market volatility has kept some traders away. This this meme stock is back in play. Gamestop (GME) was up about 29% today on very little news but lots of option trading volume. Option volume and open interest are useful figures to watch and when done right, We're watching AMC, ATER and a few others that also had high percentage stock gains today in their share price.

Dan Passarelli, CEO - Market Taker Mentoring

Different chart patterns can indicate specific stock trading opportunities are setting up. Trading key moving averages is one such pattern. There are several different trading techniques that can be used depending on the moving average time frame and the expected time in trade.

One such trading setup is trading breakouts. When a stock breaks above a key moving average in trading, it can indicate potential bullish trade setups. Conversely, when stocks break below key moving averages, it can indicate a bearish breakout trade to the downside.

Dan Passarelli, CEO - Market Taker Mentoring

There was a big stock sell off in the S&P500 today. And the reason is all the traders reducing stock market risk and refusing to buy the dip. Volume was average, indicating a lack of conviction on the part of traders.

To me, that means this sell-off could be slightly exaggerated. There could be more room to the downside, but over the next couple of weeks, the more likely scenario is that the stock rallies somewhat.

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.