These will be good to keep in mind as the market changes constantly and doing the same strategy doesn’t work all the time.
Trading strategies for non-volatile markets
- Iron condors
- Selling puts or calls
- You’ll be collecting a premium and not be reliant on how much the stock moves.
- You can sell puts/calls on a non-volatile market and only worry it doesn’t go above or below a certain price.
Trading strategies for volatile markets
- Day trading
- Buying naked calls or calls
- You’ll be profiting on how much the stock price goes up or down.
- Put or Call spreads
- In a volatile market, you really want to sense market sentiment and go with the flow. So if it’s a bear market, a call spread, if it’s a bull market, put spreads.
- The logic behind spreads works the same as buying naked calls or options except with a spread you define the risk.
Market and world events that affect the market
These are usually catalyst events that cause the market to go in either direction. To know which direction is important to know what events are going on in the country and the world that could be affecting the stock market.
- CPI Reports (aka inflation reports)
- Fed meetings
- Fed minutes
- Job reports
- Earnings calls (before entering positions)
- as of June 2022, there’s a war between Russia and Ukraine that is contributing to inflation (still unsure how exactly)
- International housing market
- the housing market in China is crashing (not sure how that affects the US)