Using ETFs to navigate choppy markets
Why is overpaying for options so important to avoid?
Because if you’re not conscious about what you’re paying, the percentage-based stops many traders tend to use will impact that percentage which will cause greater losses and missed opportunities in your account.
Remember, we’re always looking to minimize losses and position ourselves to be as profitable as possible.
Check out this video where I walk you through our trade in the financial select sector (XLF) exchange traded fund (ETF).
Getting the best deal possible to scoop up the position we wanted was exactly what we did with this XLF trade.
By using the broader index, in this case the S&P 500, we were able to dial down to the XLF sector. XLF may not have looked like much in terms of its structure, but when we compared it to the health care select sector (XLV) and technology select sector (XLK), the clarity revealed itself.
Regardless of account size, the idea is to not overpay for options and pay yourself when you can, not when you must.
Because all of this is what this current environment requires traders to do… adapt. This is what we’ll be talking about on Wednesday, October 13, at 7 p.m. Central.
Join me Wednesday night as I show you how to navigate the markets, in any condition, using this index-sector ETF strategy.