Dan Sheridan - Trading Ideas in Volatile Markets
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Learn options trading from real master - Dan Sheridan a 22 years veteran option floor trader.
1 WMV video running time is 50 minutes
This recorded webex contains mentoring sessions from Sheridan Options Mentoring that took place on June 2010.
Dan discuss the cons and pros of Speculative trading using
TIME-BOMB BUTTERFLY and CALENDAR SPREADS in great details:
Put the trade on 10 -20 days prior to expiration but can plant them farther out in time
Best in a high IV environment with the expectation of IV going down (after earnings)
It is used as a direction trade instead of buying long options
They are placed OTM not ATM
Its a one month trade in and out with no adjustments made
Use either Puts or Calls (which ever has highest premium/profit)
Sell the short options at the strike you predict the movement to go to and place the wings 2-4 strikes apart
If using it as a play on earnings, evaluate the effect of the prior earnings announcements:
Look at the last 3-4 earnings effect on the underlying price
Look at the last 3-4 earnings effect on IV (see how they drop)
Compute where the expected move will be and place the short option there
Place the short option inside 1 SD
You could put one on each side of the ATM the day before earnings
Suggested: All indexes, stocks over $70
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http://isavelink.com/hmq91tzxneez
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