With markets having a big breakout on Thursday, our bullish US equities case continues to be confirmed. And with new all-time highs usually comes lower and lower volatility being priced into options.
For the past month, we’ve been keeping it pretty simple here at All Star Options. We like simple, so it comes naturally to us. But more importantly, the market is telling us to keep it simple. When volatilities are low and charts are pointing higher, it pays to be a buyer of your friendly neighborhood call option. Options Trading 101. Being buyers of calls in this environment puts us on the other side of the trade from the pikers who fill up ballrooms and banquet halls at Turnpike Hiltons and Marriotts to learn about the latest and greatest Covered Calls Road to Riches.
You’re better than this. You’re willing to take smart risks and reap the upside rewards.
There is a time and a place for more exotic ratio spreads, iron butterflies, strangles, and straddles, but this isn’t the environment for that. And until it is, we don’t see any reason to force the issue. We’re not looking for style points, we’re looking for gains. We’re simply going to keep taking what the market is giving us. And right now, it keeps giving us wonderfully bullish setups with cheap call options. And hey… if all the doom-and-gloomers are right and this fall we’re headed for a major comeuppance, the beauty of cheap long calls is our risks are clearly defined and our costs of entry are minimal.
So let’s talk about our next opportunity…