For the time being, we'll look at Out of the Money bear call credit spreads for new trades. It's our favorite strategy for a side-ways to down markets.
- We're looking for optionable stocks with tight bid - ask spreads
- Weak sectors
- Weak industry groups
- Bearish Power Gauges
- Declining Long Term Chaikin Trends
- Stocks near the Chaikin Trend or bouncing up near resistance in an overall downtrend.
- No earnings within 30 days of trade initiation
- Chaikin sell signal
- We generally sell spreads that have between 3 and 6 weeks until expiration. But that's a matter of personal choice.
Here's one we traded today: SOLD -6 VERTICAL SINA 100 SEP 14 52.5/55 CALL @.60