6 Things Options Investors Must Watch This Week
Last Week: Last week ended with a bang when the markets were all up over 1 percent. But the scoreboard for the week was still red for all the major indices.
This Week: For the last few weeks, markets have been dropping, most likely pricing out the likelihood of the ECB delivering QE next week. Put simply, it's important to watch Draghi on January 22. The logic behind the assumption suggests that the Swiss know for a fact QE is coming, which might've caused last week's currency debacle.
How To Trade It: There is no reason for novice traders to be involved in this week's price action. The ECB meeting makes it a binary play, meaning it's a coin flip. Coin flip odds are 50/50, and are considered more gambling than investing.
Nimble traders can structure credit spreads to take advantage of elevated premiums. It is paramount to have a balanced portfolio to minimize the potential damage in case of mishaps.
Fun trades could include guessing a direction for the markets, and buying a debit spread to capture the moves. Homework will be overrated, given the nature of the binary trade.
Names Of Note: GoPro Inc (NASDAQ: GPRO) shows weakness. It is a potential short pick of the year; if it loses the current trend, lower prices can be in store for this "momo."
Apple Inc. (NASDAQ: AAPL), meanwhile, reports earnings soon. iPad sales could be weak, but traders will only want to hear what's in store for the future.
Google In Flux: Technicians are calling for lower prices on Google (NASDAQ: GOOG); downgrades tried to crush it last week, yet it managed to outperform. It has resistance, but it could be a surprise if the markets bounce.
Check out the video below for a full recap of this week's options outlook:
Image credit: Katrina Tuliano, Wikimedia
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