When asked about kicking off market action for this week, Scott Bauer gave a very blunt answer:
“Volatility, and we don’t know what’s next.”
That first question kicked off Scott’s most recent appearance on the Schwab Network’s “Big 3” segment earlier this week. Scott touched on the unpredictable landscape traders are currently facing, and highlighted some key factors that are driving these conditions:
- Possibly seeing the biggest spike and decline in oil prices—both in the same day
- Oil tankers getting through the Strait of Hormuz
- The Iranian conflict
As Scott noted, the current market is trading on every last bit of news. While he admitted these current conditions are ideal for day traders, he offered a potential solution for anyone looking for a longer timeline on options (or looking into stocks):
“Pick where you want an entry to be, and start piecemealing your way in.”
To that point, Scott fired off three trade examples, whose timeframes extended well beyond those of day trading. Although he structured each trade example differently, Scott pointed out two key details that all three stocks he covered had in common:
- Extreme Implied Volatility (IV)
- Inflated Option Premium
These two underlying factors wound up making Scott hit paydirt.
Going into today’s trading session (Wednesday, March 11), the results from all three of Scott’s trade examples would currently show a combined gain of 160%!
Let’s break down each trade example:
Taiwan Semiconductor (TSM)
Scott said he would have sold an iron condor, and collected a $2.60 credit. He would have closed half of the position today, and paid $1.50
Up 50% as of this morning.
The analysis, insights, and strategies shared by Prosper Trading Academy’s coaches in Prosper Insider are strictly for educational and informational purposes only. All content reflects the personal opinions of the coaches and should not be construed as specific investment advice or recommendations. Any examples discussed are illustrative in nature and do not represent actual live trade signals or instructions to buy or sell securities. Trading involves risk, and individuals should carefully evaluate their own financial situation before making investment decisions.
SPDR Gold Trust (GLD)
Scott said he would have sold another iron condor, collecting $3. It’s currently trading $2.
Up 40% as of this morning.
The analysis, insights, and strategies shared by Prosper Trading Academy’s coaches in Prosper Insider are strictly for educational and informational purposes only. All content reflects the personal opinions of the coaches and should not be construed as specific investment advice or recommendations. Any examples discussed are illustrative in nature and do not represent actual live trade signals or instructions to buy or sell securities. Trading involves risk, and individuals should carefully evaluate their own financial situation before making investment decisions.
Goldman Sachs Group Inc. (GS)
Unlike his first two (which used iron condors), Scott said he would have sold a put spread at $4.50 in this trade example. He would have closed half of the position yesterday for $1.75.
Up 70% as of this morning.
The analysis, insights, and strategies shared by Prosper Trading Academy’s coaches in Prosper Insider are strictly for educational and informational purposes only. All content reflects the personal opinions of the coaches and should not be construed as specific investment advice or recommendations. Any examples discussed are illustrative in nature and do not represent actual live trade signals or instructions to buy or sell securities. Trading involves risk, and individuals should carefully evaluate their own financial situation before making investment decisions.
