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What To Trade Until China Slowdown Passes

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Note: This is part of newsletter sent on 22-September-2015 to my newsletter subscribers.

Until the China dilemma passes, it looks like VIX is here to stay.

And when VIX stays and is not willing to go down, then 2 things happen:

1. Option prices just DO NOT melt,
2. There is too much movement in markets.

So until VIX is not dropping what can you do?

Well some cash can be used in buying slightly OTM options. But remember – risk management is very important here. You should trade this with less than 1 or 2% of your capital. Option can expire worthless so risk management is very IMPORTANT.

Before you pack your bags from your office and go home read this:

http://www.theoptioncourse.com/out-of-the-money-option-buying-strategy/

Do it for next month though. Give your options some time. πŸ™‚

Why we buy slightly out of the money options during volatile times?

Since VIX is high, the ATM options will be very costly and if VIX drops they can melt away fast. OTM options on the other hand will be cheaper and during volatile times will increase faster in percentage terms than the near the money options. But the most important reason is risk management. Just because the markets are volatile you should not buy ATM (At The Money) options.

Note for those who have taken my course: Due to too much volatility why not buy a few extra OTM options – this reduces profits slightly but eventually when a huge movement comes the whole trade can be in profit. And if the movement does not come and VIX drops, we profit anyways. πŸ™‚

Try it – Do not try to make 30 points every month. When times are tough sacrifice some profits to buy extra protection.

Hope it helps during these volatile times.


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1. If you have still not subscribed for my free 5 days course you can do by filling the form above. You will learn a lot about option trading.

2. If you are a new option trader, not much experienced and are making losses you can do my paid course. I recommend Nifty Conservative Option Course for beginners because it is easy to understand and easy to trade. Even a 18 year old young trader or a housewife can learn it and start trading from next day. It will help you to earn consistent monthly income without any software or speculation or stress or big risk. You will learn proper hedging strategies that works in any market condition.

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About the author: I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.

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