Details Matter When Trading Options

The old saying goes, the devil is in the details. The point is that many things in life may seem simple but they are not. Understanding those seemingly simple things and gaining advantage (profiting) from them requires that you pay attention to the details. Anyone who has followed us at Top Gun Options has seen how we pay attention to both the big factors and the small ones that have the potential to drive the markets. Our DRINC acronym attests to our attention paid to national politics (Democrats) and to foreign actors (China, Russia, Iran, North Korea) who actions can muck up the markets, not to mention the world. One of the areas where we especially pay attention to the details is with the Federal Reserve. Gratis Video Shows Why You Only Need to Own One Stock! Get Actionable Trade Ideas From Our Free Market SITREP (Situation Report) NewsletterWhat Does the Fed Say and What Does the Fed Mean? When Alan Greenspan was chair of the Federal Reserve, he was acutely aware of how a single word that he spoke could torpedo markets or cause a misplaced rally. Thus he often spoke in long, wordy dissertations that carried little meaning. The mean coined the expression “Fed Speak” to describe this. We see the same dynamic today when Chair Powell talks. The market can soar, turn on a dime, and plummet within moments based on a word or even his tone of voice. One of the things that we have taken to doing this last year to sort out what the Fed is saying and what they really mean is to carefully read the minutes of the Federal Reserve Open Market meetings. FOMC Minutes and Options Trading The typical sequence that folks pay attention to in regard to the Federal Reserve starts when they announce rate increases or cuts. Then the chair of the Fed speaks followed by regional Fed bank presidents over the following days and weeks. They tend to present a united front in regard to lowering or raising rates and the extent to which they will be following a given course for the foreseeable future. What is commonly “hidden” in the Fed Open Market Committee minutes that come out later are the details of their discussions. Here is where we often see a clearer picture of how hawkish or dovish their members are. Why Are FOMC Minutes Important for Options Trading? You cannot fight the Fed. That is the saying and it is true. When the economy and market were tanking as coronavirus raged the Fed stepped in and poured trillions of dollars into the economy. They bought bonds. They bought stocks. They dropped interest rates to near zero. Even as lockdowns persisted, businesses were struggling, and the death toll was climbing, the market turned on a dime and we at Top Gun Options pivoted from buying puts to buying calls, going long volatility to going short volatility, and continued to virtually print money as the market retraced its steps on the way back up. However, it is not always clear what direction the Fed is going to take. When they are raising rates to reduce inflation they commonly overshoot and cause a recession. We are probably in a recession right now although it will not be “official” until it has been going on for months because there need to be sequential quarters where the economy shrinks before economists state the obvious. That is actually about the time when the market tends to start heading back up! The point is that how hard the Fed continues to hit the brakes will affect the economy and determine if the coming recession is mild, moderate, or devastating. When trading options we pay attention to the day by day or even hour by hour market sentiment and we pay attention to where the market is headed over time. All too often traders get caught buying into a bear market rally or similar short term market fluctuation only to lose their shirts as the market resumes its course. The reason we pay attention to Fed minutes is to make sure we understand where the Fed is likely to take the economy and the market going forward. [Video] How to Make Profits in a Hostile Stock Market Originally published at on February 23, 2023. [Image] Hi Gang! Please Enjoy Today's Investing Tips and Resources... Join the "Trade LIVE Challenge" and win over $1,000 in cash and prizes! [Enter Your Information Here]( [Details Matter When Trading Options]( The old saying goes, the devil is in the details. The point is that many things in life may seem simple but they are not. Understanding those seemingly simple things and gaining advantage (profiting) from them requires that you pay attention to the details. Anyone who has followed us at Top Gun Options has seen how we pay attention to both the big factors and the small ones that have the potential to drive the markets. Our DRINC acronym attests to our attention paid to national politics (Democrats) and to foreign actors (China, Russia, Iran, North Korea) who actions can muck up the markets, not to mention the world. One of the areas where we especially pay attention to the details is with the Federal Reserve. Gratis Video Shows Why You Only Need to Own One Stock! Get Actionable Trade Ideas From Our Free Market SITREP (Situation Report) NewsletterWhat Does the Fed Say and What Does the Fed Mean? When Alan Greenspan was chair of the Federal Reserve, he was acutely aware of how a single word that he spoke could torpedo markets or cause a misplaced rally. Thus he often spoke in long, wordy dissertations that carried little meaning. The mean coined the expression “Fed Speak” to describe this. We see the same dynamic today when Chair Powell talks. The market can soar, turn on a dime, and plummet within moments based on a word or even his tone of voice. One of the things that we have taken to doing this last year to sort out what the Fed is saying and what they really mean is to carefully read the minutes of the Federal Reserve Open Market meetings. FOMC Minutes and Options Trading The typical sequence that folks pay attention to in regard to the Federal Reserve starts when they announce rate increases or cuts. Then the chair of the Fed speaks followed by regional Fed bank presidents over the following days and weeks. They tend to present a united front in regard to lowering or raising rates and the extent to which they will be following a given course for the foreseeable future. What is commonly “hidden” in the Fed Open Market Committee minutes that come out later are the details of their discussions. Here is where we often see a clearer picture of how hawkish or dovish their members are. Why Are FOMC Minutes Important for Options Trading? You cannot fight the Fed. That is the saying and it is true. When the economy and market were tanking as coronavirus raged the Fed stepped in and poured trillions of dollars into the economy. They bought bonds. They bought stocks. They dropped interest rates to near zero. Even as lockdowns persisted, businesses were struggling, and the death toll was climbing, the market turned on a dime and we at Top Gun Options pivoted from buying puts to buying calls, going long volatility to going short volatility, and continued to virtually print money as the market retraced its steps on the way back up. However, it is not always clear what direction the Fed is going to take. When they are raising rates to reduce inflation they commonly overshoot and cause a recession. We are probably in a recession right now although it will not be “official” until it has been going on for months because there need to be sequential quarters where the economy shrinks before economists state the obvious. That is actually about the time when the market tends to start heading back up! The point is that how hard the Fed continues to hit the brakes will affect the economy and determine if the coming recession is mild, moderate, or devastating. When trading options we pay attention to the day by day or even hour by hour market sentiment and we pay attention to where the market is headed over time. All too often traders get caught buying into a bear market rally or similar short term market fluctuation only to lose their shirts as the market resumes its course. The reason we pay attention to Fed minutes is to make sure we understand where the Fed is likely to take the economy and the market going forward. [Video] How to Make Profits in a Hostile Stock Market Originally published at on February 23, 2023. [Continue Reading...]( [Details Matter When Trading Options]( And, in case you missed it: - [Technical Trends for the Week of February 27th – March 3rd]( - [The 2 Best Pharmaceutical Stocks To Buy]( - [TELA Bio Announces Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)]( - [Transactions with Shares and Linked Securities in Genmab A/S Made by Managerial Employees and Their Closely Associated Persons]( - [Grant of Restricted Stock Units to Management and Employees and Grant of Warrants to Employees in Genmab]( - FREE OR LOW COST INVESTING RESOURCES - [i]( [i]( [i]( [i]( Sponsored [100% Or More Every 3-10 Days?!]( It sounds impossible. But over the past 3 years, we’ve proven it. There’s a powerful trade you’ve never heard of, and it has delivered an astounding 99.1% win rate for us over the past 3 years. And these aren’t small wins, either: the majority of them delivered 100% or more every 3-10 days. We lay it out for you in a special video presentation - [click HERE to see it for yourself.]( [Privacy Policy/Disclosures]( - CLICK THE IMAGE BELOW FOR MORE INFORMATION - [i]( Good Investing! T. D. Thompson Founder & CEO [ProfitableInvestingTips.com]() ProfitableInvestingTips.com is an informational website for men and women who want to discover investing and trading products and strategies to educate themselves about the risks and benefits of investing and investing-related products. DISCLAIMER: Use of this Publisher's email, website and content, is subject to the Privacy Policy and Terms of Use published on Publisher's Website. Content marked as "sponsored" may be third party advertisements and are not endorsed or warranted by our staff or company. 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