The current volatility has created a fascinating trading environment as momentum stocks continue to make wild price swings. As option traders, trying to time an entry point is more crucial than buying a stock because we are on the clock once we take a trade.
Options are time sensitive and expire by a given date so it is important to use technical indicators and momentum to help you figure out where a stock could be by a certain date. With October options expiring next week, we have been building our Watch List into November and December for possible new trades. Trying to pick the best 5 out of 10 option trades or 10 out of 20 gets even more challenging because there will be some you miss that could have incredible gains. This can be frustrating but by keeping a Watch List it will help you win more trades than lose.
We had SolarCity (SCTY, $46.62, up $8.29) at the top of our Watch List this week as a possible call option trade but we missed getting into the position as shares were a little choppy and we were trying to time a perfect entry point.
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