Webinar Recap: Mean Reversion and Volatility Trade Structures
With school back in session in many areas of the country, I figured it was time for some nice educational webinars on options trading. First up: mean reversion and volatility trade structures, two advanced trading strategies that I use on a regular basis.
Mean reversion may actually set up nicely for a counter move soon, so our discussion was really great timing. However, since this is a very difficult trade, expectations need to be very low; this strategy is not for long trades, especially given the trend that is currently in place.
Market Action
The market was pounded today – it was the worst day of 2015 – and it left us trying to figure things out. We talked about it in the chat room , and with a focused effort we added many put plays that saved our bacon.
This may not be a bear market (just a vicious bear run), but we all want to participate in the run down. Some people in the chat room said this was their biggest trading day ever! We all have to be aware that there is the chance to be on the losing side, so this was a great day to talk about good risk management.
China continues to roil the markets and play with investor psychology. Oil, meanwhile, is on a downward slide, hitting a 6 1/2 year low last Friday ($41.20); a move into the $30’s is very likely. The VIX still shows high complacency, which is playing out in sluggish trading.
The Fed was also in the news this week after releasing their July meeting minutes. Naturally, they did not say outright whether they were going to raise interest rates in September, but they did confirm that they are now waiting to make sure economic data backs up their expectations of growth, strength, and inflation levels.
Bob Lang discusses the markets, options trading strategies, charts and technicals, and take questions:
Watch the webinar below to learn about mean revision and catch up on the 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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