Is there any way to profit from all this volatility?
Answers
4085 points
EthanR answered one year ago …
By using technical analysis, you can buy stocks when they are very oversold as they are now, and hold them until they come back. If you feel the market is likely to go lower, buy shares of the ETF's that double short the market, such as QID, DOD, and SDS.
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474 points
spider348 answered one year ago …
Reduce your holding time. Maybe even go flat at the end of each trading day. Quick exits and tight stops. Avoid momentum plays. Hedge if holding overnight. Or wait it out.
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2183 points
ChaosNantuko answered one year ago …
Option premiums are hitting all time highs. If your a long term investor, consider selling OTM covered calls on your stocks. if the market goes down, you lose less, if the market goes up, you can always buy back the call option, most likely at a significant discount to what you sold it for.
aside: options are for everyone, not just short term traders. Even warren buffet uses options.
178 points
KenTrester answered one year ago …
Absolutely! Volatility is an option trader's best friend. There is a world of money to be made if you can harness this energy of the market's moves through call and put options.
To learn more, I encourage you to read an article I recently wrote: http://www.optionszone.com/learn-more/ken-trester/2008/10/volatility-the-o ptions-buyers-secret-weapon.html
