Monday, February 13, 2006

Volatile trading instruements


If you have alot time, then trade futures. If you don't have a lot of time, and you are prone to getting stopped out when a trade does indeed go your way or sometimes you get scared out of the trade from too much heat, then why not options?

Good option vehicles are in the form of high priced stocks which are volatile and liquid such as GOOG, PD, and CME.

Options that follow indices are even better, such as DIA, SPY, and QQQQ being the most volatile.

Options on futures have larger spreads, but they too are a choice, such as YM, ES, ER2, and NQ.

Here's a list of the active ETF's which you can trade options on: http://finance.yahoo.com/etf/browser/tv


Also, you can trade volatily, trading CBOE's product VIX, which follows the DJI volatility and acts as a contrarion indicator or the inverse of how the DJI moves, however, these options are European style, and the VIX futures are illiquid.

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