I’m not talking about buying leaps on companies as I already do that, but I’m talking about no direction, IV plays like butterflies and condors. Is having good technical analysis a must to succeed in these strategies, or are there ways to trade them without it? If so, what are those ways?
If technical analysis is a must, what should I be reading? I have the book “introduction to technical analysis” and considering buying “beyond candlesticks”. What else is recommended?
Do I must have a lot of technical analysis to *trade* options?
byu/DarthRevanGonk inoptions
Posted by DarthRevanGonk
3 Comments
Nah just flip a coin.
Works half of the time.
technical analysis is a poor mechanic for time decay option trades. it’s fine for intraday, maybe swing trades… but for options we are typically locked into a position for a longer duration when premiums are rich.
my preference is to try and understand fundamentals and finances of the business, and to at least attempt to track the economics in play in regard to interest rates, earnings, sentiment, and insider trading, etc.
the only technical analysis I do is to see if something is near an ATH… in which case I do not trade that underlying with option premium as the IV ranking and tail risk is uncomfortable.
No. You are trading the spread between implied and realized volatility. Understanding that is more important. The fundamental of option selling is that you are getting paid for providing liquidity and collecting the varaince risk premium.
Technical analysis is so subjective that we can’t even say it works or doesn’t. It’s pretty much only a thing in the retail world for a number of reasons.
Read positional option trading by Euan Sinclair. Or even start with like Tasty Trade (good intro, not an end destination tho). That will take you so much further than any TA book will