MTM Options Trader Newsletter - Straddle Option and Strangle Option Strategy Explained

[image]( [image] This Week in the Market After a brisk week of trading, Nasdaq soared while the Dow limped into last week’s close. The Dow closed around a potential support level at the 35,550 level. Despite the move lower, the Dow is still well above its 50-day moving average, just like Nasdaq and the S&P 500. Heading into this week, the bullish to non-bearish outlook on the overall market still needs to be respected until proven otherwise through breaks of considerable support levels. As has been the case, when the market pulls back, buyers continue to move it higher. We begin the holiday season this coming week, with the market closed for Thanksgiving on Thursday and closing early on Friday. Trading volume should be much lower than during a normal week. As you might expect, quarterly earnings are on the light side too; but there are a few retailers worth noting slated to report. Economic reports are crammed in tight this week with a bulk of numbers being released on Wednesday, including the notes from the last Fed meeting. Enjoy some time off and think about what you are grateful for, including your health and trading. Happy Thanksgiving! Nov 22: Existing Home Sales Nov 24: Jobless Claims Nov 24: GDP Nov 24: Trade in Goods Nov 24: Personal Income Nov 24: New Home Sales Nov 24: FOMC Minutes [Read Our Blog]( Straddle Option and Strangle Option Strategy Explained An option strangle or straddle is an option strategy that option traders can use when they think there is an imminent move in the underlying but the direction is uncertain. With either of these strategies, the trader is betting on both sides of a trade by purchasing a put and a call simultaneously. An option strangle is generally just out-of-the-money (OTM) but with the same expiration. It is usually used when the underlying is between strike prices. An option straddle is when the underlying is trading at or close to a strike price and the same call and put strike are purchased with the same expiration. [Continue Reading ...]( MTM Watchlist Here are several trade ideas we will most likely focus on in group coaching class this week: AMZN – After several successful vertical spreads last week, including a very profitable bull call spread, we will be watching for a break above the $3,700 level for more additional bull calls. TSLA – The same goes with this stock, especially after it broke above resistance at the $1,100 level on Friday. Bull call and bull puts will be considered. TSM – After rallying into some potential resistance at the $125 level, the stock looks poised to reverse. Bear call and bear put spreads will explored. [image] The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by calling (888) OPTIONS; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2021. All rights reserved. Reproducing or redistributing this content is a violation of federal law. [image] If you do not wish to be contacted via email, you can unsubscribe using this link: [Unsubscribe]( Unsubscribing from email notifications DOES NOT cancel your class, subscription or recurring payments. We recommend that current students do not unsubscribe from email notifications. If you unsubscribe from email notifications, you will not be notified on how to access the classes or subscriptions in which you are enrolled. Market Taker Mentoring, Inc. PO Box 117 Frankfort, Illinois 60423 United States