MTM Options Trader Newsletter - Let’s Chat About Option Vega

[image]() [image] This Week in the Market Stocks and the market moved higher once again as overall optimism continues to entice buyers and keep sellers at bay. Simply put, it seems like the market refuses to move lower. The S&P 500 clipped the 5,000 mark for the first time Friday and will be looking to add to those gains this week. The Dow has been lagging a little behind Nasdaq and the S&P 500. As has been the case for several months, a bullish to non-bearish outlook makes sense until proven otherwise. Implied volatility levels and option prices continue to drift lower as the market hikes higher. Quarterly earnings are starting to slow, but several retailers are scheduled to announce in the coming weeks. As far as economic reports go, a few numbers are expected, including the latest retail sales figure and CPI and PPI. Remember, you need to make time to both review your trades and work on your trading plan. There are no excuses! Have a safe, healthy and happy Valentine’s Day and week! Feb 13: CPI Feb 15: Jobless Claims Feb 15: Import Price Index Feb 15: Retail Sales Feb 15: Production and Utilization Feb 16: Housing Starts Feb 16: PPI Feb 16: Consumer Sentiment [Read Our Blog]() Let’s Chat About Option Vega Implied volatility or the lack of it has been a hot topic for option traders over the past several months. If you are unfamiliar with IV and/or option vega, here is a brief explanation to get you up to speed. Option Vega Vega measures the impact implied volatility (IV) has on option premiums. Keeping it simple, for every 1% change in IV, vega will change the premium by that amount. If IV rises 1%, option premium will rise by the amount of vega. If IV falls 1%, option premium will drop by the vega amount. Because of this, [Continue Reading …](=) MTM Watchlist Here are a few trade ideas we will most likely look at in group coaching class this week: SPY – Why change anything up when vertical debits, credits and calendars have been doing extremely well? Expect similar trade ideas again on the ETF. NVDA – Several successful bull call spreads have been initiated on this bullish juggernaut over the past couple of weeks, and we will most likely consider more. NFLX – After gapping higher on earnings, the stock has continued to trade in a tight range. Additional iron condors between support and resistance levels will be 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 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 - 2024. 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