23
May
Trading Volatility

Trading Volatility The Smart Way  Increases Returns Trade After Trade

 

Volatility trading is essential to master when it comes to trading options.  Most traders do not understand just how important it is, but it actually determines the outcome of most option trades.

Volatility’s Impact on ROI

Volatility has a tremendous impact on the return of an options trade.  Trade against it, and most likely you will not make a profit long-term.  Trade with it, and your trading will have a much better chance of seeing results.  Why?  Volatility has a very strong impact on a portfolio’s performance.  If you are on the wrong side of volatility, it can easily destroy your trade.  This is a core reason why most options traders lose money year after year.

Studies indicate that volatility has 6X the impact on a portfolio compared to theta.

Therefore, if you can improve your volatility trading, you can increase your returns substantially.

How To Improve Your Volatility Trading

There are 2 key components to volatility trading.

  1. Understanding price to volatility correlations.
  2. Understanding how to manage Vega.

Most traders do not understand the above.  In order to profit from volatility, you must first understand how it changes relative to price changes of the underlying asset you are trading.  Once you understand that, then you need to know how to manage Vega.  Vega is managed by higher order Greeks such as vomma, vanna, veta and ultima.

In our SJ Options course we teach our clients how to manage vega properly.  We also provide our clients with tools to manage the higher order Greeks effectively!

Volatility Trading Made Easy

Our invention, the Trade Assistant™, has the most sophisticated volatility analytics on the market today.  It makes volatility trading easy.

Below you’ll find some cool things our invention can do to increase your returns through our advanced volatility analytics:

  1. Know which option strategy is best to apply at any given moment.
  2. Know when to trade and when not to.
  3. Know the best adjustment to make to any trade.
  4. Know when to enter and exit a trade for maximum profit.
  5. Build any trade you can imagine with only one click.

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