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[Options Premium] The Utility of Volatility

November 18, 2022

After some pretty significant broad market moves in both directions in recent weeks, it's starting to feel like market participants are a bit tired. And can we blame them?

While volatility is often beneficial to active traders who have a good game plan to pounce at opportunities that are presented in such environments, eventually, we get tired. It's exhausting.

Knowing this, we can take advantage of this potential situation by crafting trades that take advantage of the likely decrease of options premiums that often takes place when traders are tired and stocks and indexes start trading in smaller ranges.

So let's use the Utilities sector to express a bet on compressing ranges...

 

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