WDIS: Two Yutes - Beginner Options Trading - July 19, 2021 - Defending and Adding Positions on a High Vol Day

published 5 days ago by tastytrade, Inc.

Volatility product VIX is up around 25% today! Tom says a monster spike like this will work against a lot of the yutes’ existing trades (increased volatility doesn't do short positions any favors), but it creates a lot of new opportunity. It’s a fear index: when the world gets scared, that’s the most opportunistic time for traders. E wonders if he should get more aggressive with his existing positions at a time like this, but Tom says it’s more about: defending current positionsputting on new trades to take advantage of the increase in volatility E and Kay make some defensive moves, rolling their untested calls and puts up and down thus collecting more premium, and reducing their cost basis), and finally look for some new trades to put on!Bonus Lesson: Tom explains that based on tastytrade’s research, the average length of a VIX explosion is usually between 3 and 5 market days.

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