Nick Katiforis

NICK KATIFORIS
OPTIONS - FUTURES - STOCKS - CFD’S - FOREX

Phone: 03 8636 3333 Email: info@nickkatiforis.com

Volatility Trading

Whilst traders of stocks and futures are limited to trading the price action only, option traders can also trade the volatility of a market. Just as price develop trends, so too does volatility.

The difference is that volatility is usually a lot easier to pick than price. This is because volatility trends in a slower fashion and takes longer to change than price.

If volatility is low and you expect it to increase there are a number of strategies that can be employed to benefit from such a scenario unfolding. They include bought strangles and straddles and ratio backspreads.

If you believe volatility will decrease you can initiate option strategies to benefit, such as written strangles and straddles.

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