With market volatility really picking up over the last number of weeks, it’s a perfect time to look at how you can profit from the wild swings through the use of options. Many traders hear the word volatility and immediately think it’s a bad thing when actually it’s something that can make you a ton of money. Trading options allows us to take advantage of the great movement with very little capital risk. One of the great features of trading options is the flexibility that they offer. We are all taught to diversify our holdings as much as possible in order to protect capital. One of the easiest ways of doing that is through the use of options. There are so many products available to traders that offer call and put options. We have individual equities like AAPL, GOOGL, and FB. We also have index products like SPY and DIA that track the S&P 500 and Dow Jones Industrial Average. Finally, we have Exchange Traded Funds which track a whole basket of stocks that cover everything from different sectors to different regions of the world. By using options on just a few of these products we are easily able to diversify our account over many different areas.
As part of the Options Mastery program we track a Model Portfolio which contains some of the most popular names which our students trade. It’s a portfolio of 12 products with a mix of individual names and ETF’s. Part of that list includes 2 global ETF’s which give us some exposure to markets around the world. The global ETF’s that we have been trading our EEM and EWZ. EEM is an emerging markets ETF which has been very active for us for most of 2013. EWZ is an ETF that tracks markets in Brazil. September was a great month on both of these names with a number of winning trades. These two products are very liquid making them very easy to get in and out of trades. We trade these products using the Active Swing Trader system. The best part about this system is that we can use it on any product that we like. The criteria that we look for in a setup is the same regardless of the market that we look at. This allows us to easily diversify and also to get in and out in less than 20 minutes a day. This isn’t a system that requires you to be glued to that charts all day long. You can place these trades in a few minutes each day and move on with your life. This is powerful for me as I am going in 20 different directions on a daily basis.
I put together a video outlining all of the trades that our students took on these ETF’s during the month of September. I walk through how we know when to buy and sell and also how to play these moves with the power of stock options. One of the best ways to start your investment research is by looking at lists of the best stocks in different industries. From there, you can decide which ones fit your personal investment strategy. Using options allow us to take these trades with as little as $200. You don’t need a huge account size to trade these products which make them appealing to all kinds of traders. With the markets so active right now it’s a perfect time to take advantage of the volatility. Watch the video to see how easy it really is.