MTM Options Trader Newsletter - Don’t Let Those Bid/Ask Spreads Fool You

[image]() [image] This Week in the Market We all knew there would be a pullback at some point. But when Fitch decided to downgrade the U.S. this past week, stocks downgraded too as the market moved lower. The key this week will be to see if the market can shrug off the bearish naysayers once again and move higher (or at least not lower) as it has done so consistently in the recent past. A non-bearish bias looks warranted until some major support levels are broken, and at this point they have not even been tested. With the recent sell-off, however, implied volatility and option prices have ticked up higher. Several economic reports are due out this week, including the latest CPI and PPI numbers that could affect volatility and stocks. In addition, two Federal Reserve speakers are expected to talk this week with both scheduled for Tuesday morning. Quarterly earnings continue to wane, but several big-name stocks still need to report, including a few retailers. Remember, cash is always a position so do not force trades. Have a healthy, safe and prosperous week! Aug 7: Consumer Credit Aug 8: Trade Balance Aug 8: Wholesale Inventories Aug 10: Jobless Claims Aug 10: Consumer Price Index Aug 10: Treasury Budget Aug 11: Producer Price Index Aug 11: Consumer Sentiment [Read Our Blog]( Don’t Let Those Bid/Ask Spreads Fool You The market has been on a mission moving higher over the past several months, and implied volatility (IV) levels have continued to drop. That is not a good thing for option traders who love to sell premium. But what is good is that the bid/ask spreads tend to be tighter when options are cheaper. Sounds like a win/win situation, doesn’t it? Well, it can be, but option traders need to be cognizant that there are still plenty of stocks and ETFs that have wide bid/ask spreads. Let me explain. [Continue Reading ...](=) MTM Watchlist Here are a few trade ideas we will most likely look at in group coaching class this week: SPY – There may be some IV skew this week as there are a couple of economic reports coming out that might increase volatility. Double calendars will be considered again. AAPL – After gapping lower on Friday, the stock may be a tad oversold. Potential bull put spreads with longer expirations will be explored below some potential support levels. TSLA – Shares continue to bounce around and a call calendar worked well this past week. Expect more long calendars to be considered this week as well. [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 - 2023. 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