MTM Options Trader Newsletter - Not the Best Time for a Vertical Credit

[image](=) [image] This Week in the Market Stocks and the major indexes were able to surge much higher last week, despite several misses on the earnings front. The Dow has been on a tear higher since Oct. 13 and was able to close above its 200-day moving average. Nasdaq and the S&P 500 are not even close to doing that at this point, although the S&P 500 closed above its 50-day moving average for the first time since mid-September. Will this bullish energy continue? From a technical standpoint it looks possible after a slight pullback, which buyers turned around to close out the week. Implied volatility levels keep falling as the market rises. Last week was busy with economic reports, but this week is absolutely nuts. Not only do we have the latest jobs report before Friday’s open, but the latest FOMC announcement is on Wednesday. At the time of this writing, the members are expected to increase the rate by 75 basis points. How the market will react is anyone’s guess. In addition, there are still several quarterly earnings due this week, so traders and investors need to keep track of those expected dates. Have a disciplined week, and remember it’s OK not to trade if you don’t feel you have an edge. Stay happy and healthy! Nov 1: JOLTS Nov 1: Construction Spending Nov 2: FOMC Announcement Nov 3: Jobless Claims Nov 3: Trade Deficit Nov 4: Unemployment [Read Our Blog](=) Not the Best Time for a Vertical Credit Vertical credit spreads are a popular option strategy for a reason. They give an option trader a high probability of a profit, especially when the spread is initialized out-of-the-money (OTM). Who does not like a nice probability on an option trade? I always say you have 3 out of 4 ways to make money. The only way to lose is when the underlying moves against you in a way that was more than intended. That said, there may be one time in particular when it is not optimal to initialize a vertical credit spread. Let’s take a look. [Continue Reading ...](=) MTM Watchlist Here are a few trade ideas we will most likely consider this week in group coaching class: AAPL – After gapping and moving higher late last week, the stock appears poised to move higher again if it can get past its 200-day moving average. Potential bull call spreads or long calendars at the moving average will be explored META – After a successful long calendar following earnings last week, the stock is still hanging around the $100 level and may warrant another look. GLD – If the market keeps rallying, gold prices may continue to fall. Potential bear put and bear call spreads will be identified if it stays in a downtrend. [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 emailing investorservices@theocc.com; 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 - 2022. 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