Benzinga Options Outlook for the Week of May 27
Options Outlook wrap up for this week is to not get run over by range bound trading.
There was a first attempt by the shorts to push for a downside movement after almost the longest bull run in history, with a move from 168 to 164 via the SPY. This gave outright put buyers a chance to really make some money instead of just sitting on the side lines, or writing for decay.
The major analysis from this move is the follow through. Retail got stuck chasing long and short opportunities late after the move, ultimately getting completely decayed out by options writers. This week, the focus will be to look to size back down options positions, focus back on writing strategies and waiting for consolidation to work itself out.
It's important to recognize the current environment and how it'll pan out for different strategies. The range bound trading will most likely dealt with the best via options writing for decay and vol. If another big move happens, it'll be important to catch the right horse via some OTM options to get the biggest bang for your buck.
Remain cautious chasing this trade. Let your profits sit and wait for another good move.
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