Options Trading Webinar: How to Analyze Volume and Option Flow
As a technician, I always have one eye trained on several indicators. They are indispensable guides for my success as an options trader, which is why I blog and talk about them so much. Because I already covered two favorites during previous webinars – sentiment and volatility – it was time we focused on two more: trading volume and diagonal leap strategies.
During this options trading webinar, I shared my tips on how to analyze both. We started by talking about the current market malaise, where price action has been quite poor and stocks are struggling to find direction. Perhaps it’s a pause in front of the Fed meeting next week, which makes sense – nobody seems to know what is going to happen. To be sure, volatility is elevated just in case, but more than likely we’ll see that volatility start to decline once the news is out.
I talked about the importance of volume and paying attention, especially to big volume situations. Turnover, or volume, is the polygraph of the markets – they tell us exactly what is happening (buying or selling and the level of commitment involved). Volume almost always precedes price.
In addition, I mentioned some interesting diagonal leap strategies using Netflix and the diagonal calendar as an example. Netflix has set us up to get long a leap and cut risk by selling a shorter term call, perhaps even taking the entire amount of risk off the table.
This Week’s Market Action
After rising last week on a decent jobs report, markets have resumed their slide down on some decent volume. Low crude oil prices caused by decreased demand is to blame. Meanwhile, the VIX rose on poor economic news from Europe and China. Puts and calls are running hot, the McClellan oscillators are oversold, and breadth is horrible. From where I sit, it seems like the markets are waiting for news to shake things up. Could the Fed’s two day meeting next week be the catalyst?
Bob Lang’s Options Trading Webinar on Volume and Option Flow
Watch the webinar to hear Bob Lang’s strategies on how to analyze volume and option flow and get a more in-depth update on this week’s market activity.
If you love the insights you gained in this webinar, don’t miss your chance to join us live. Each week I host a FREE options trading webinar during to discuss recent market action, current plays and charts of interest, along with the trends that may affect future action. Join us live and get your chance to ask your own trading questions!
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