There is nothing more satisfying than buying a right put option and having it working in a falling stock, seeing your time and effort invested leads to a handsome payoff.

When you buy put options for speculation, cheap put options have the potential for spectacular gains, but finding under priced put options that have a bearish reversal potential is not easy.

You need tremendous patience and, no doubt, you might have to try a few orders before you get one working in your favor. More often cheap put options can expire worthless, so you must have the patience and discipline to sticking to your trading plan.

To get your best deal, buy put options on down trending stocks that are temporarily rallying, it increases your profitability potential to buy your options for a bargain price.

Check the implied volatility; buy options on stocks that have the potential for surprise volatility. Stocks tend to fall much faster than they rise, so buying put options before the stock fall tends to be a better bet on surprise volatility.

Whether you’re just getting started in bearish reversal options trades or looking for ways to enhance your trading success, you must have a trading plan. A plan for taking profits and cutting your losses, without one, you will find it very difficult in making a profit.

“You just have to be opportunistic, and try to figure out what creates value… where the bottom is, what creates incremental value, and in what combinations” - John Malone

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