How is volume used to identify trades?


What is a Option Backspread?
Which trades are used when volatility is high?
What is a Option Ratio Spread?
How do you calculate probability of profit?
Understanding Stock Options Volatility Trading
How is a volatility extreme identified?
Which trades are used when volatility is low?
What is a Option Straddle?
What is a Option Strangle?

Option Volume Trades

We look for stocks with options volume that has doubled in either call or put volume compared to past 200 days average volume. Once identified, these are checked to determine if it is a true directional volume increase and not just large straddles, strangles or spreads. If it is then we test call or put backspreads in the same way we do for low volatility trades.

A service of Trotter Trading Systems
Friday, Aug 29, 2008