It is common for traders that are new to options to make many of their trading decisions based solely on the prediction of the price move. While the price move is an important component of the overall success, the ultimate profitability is dramatically impacted by volatility pricing.
Back on September 11th, we published a blog discussing the 5 Critical Things to Consider. Now, just a week later, there continue to be new red flags waving the warning signs.
Back on August 11th, we published our blog suggesting the market swing low was in and that a multi-week rally was likely. 1 month later, the S&P500 has now crested the 2000 level and has begun a short-term consolidation. We are now trying to discover if there is increasing risk of a market reversal and selloff or if the market is just taking a break prior to continuing to advance.