Congestion is a market situation where the demand of contract holders wishing to exit their existing positions is matched by the supply of willing participants wishing to enter into the offsetting position. It is often a period of time when a stock trades either below resistance or above support.
We look to play these support/resistance as entry points.

Click the video below to see how we applied this methodology.

Follow me on Twitter @MikeShorrCBOT

about the author:

Mike Shorr

Since 1994, Michael has been an on-the-floor market maker, Vice-President of Interest Rate Derivatives for Knight Financial Products and Director of Education and Options Instructor at Trading Advantage. He makes the oftentimes complex world of options and trading accessible to the novice and advanced trader alike. Michael has a Bachelor of Science degree in Statistics and Finance from the University of Illinois Champaign-Urbana. He presently is Director, Trader Education at ProsperTradingAcademy.

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