Vlad Karpel, Founder of Tradespoon.com Talks Option Strategies

Vlad Karpel is the Founder of Tradespoon.com and was a special guest on Benzinga's #PreMarket Prep to share wisdom he has accumulated through his 15 years of experience in building a statistics-driven stock picking system.

Jumping right in to it, Karpel was asked what his trading strategy is going in to an uncertain environment.

“In a low volatility environment, we are looking to buy debit spreads,” Karpel said. “Since there is no volatility in out-of-the money call spreads, the risk to reward ratio is not there.”

Karpel is looking at the transportation and conglomerate sector to buy July credit spreads. Karpel favors buying deep-in the money calls or put spreads. By using this strategy, if a stock is little changed as the option approaches expiration, the option is still in the money.

In terms of airlines, Karpel is bullish Spirit Airlines SAVE and Delta Air Lines DAL. among others. Karpel believes that long-term, transportation is a good bet despite short-term concerns stemming from a new round of violence in Iraq that may have negative implications in the global oil market.

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The consumer discretionary sector has been on Karpel's bearish radar, specifically Kohl's KSS and J.C. Penney JCP. Karpel recommended his clients to initiate a deep-in the money put spread.

When it comes to the overall market, Karpel has a bullish view but believes that small corrections will be a recurring theme for the remainder of 2014.

Karpel shies away from some of the momentum-names such as Facebook FB, Priceline Group PCLN, Twitter TWTR, among others.

Karpel finds these names too volatile, especially lately. However, Karpel does follow these momentum names and pays attention whenever there is a dip. If Karpel is bullish on momentum stock on a one-year or more time frame, Karpel does recommend a position.

For those traders who do trade these momentum names, Karpel would recommend selling a call or put spread that is one deviation away. Naturally, Karpel notes that implementing this strategy is only intended for sophisticated investors.

Check out the video below for a full recap of Vlad Karpel's interview on #PreMarket Prep: