If you are here looking for actionable advice on reading this market, my best advice is just have a seat and relax. If you aren’t patient to sit on the sidelines this is precisely the type of market that the vast majority of traders get carved up in. They first get whipsawed in the back and forth and then make the fatal sin of trying to find more trades in a market that they just proved to themselves is very tricky to trade. I have managed to eke out some gains in February but first to admit they came from playing good defence and rearranging or spreading my option positions. Maybe 2 out of 10 worked right out of the box. And out of that I managed a couple very small 10% – 15% losses and the remainder modest gains. The beauty of the options market is it gives you so many different avenues to trade, including fixing mistakes and turning potential trouble into profits. That is why Target Zone Trading has such a long history of real time success—- there is a lot more to it than just buying and selling puts and calls.

A recent example is JPM. Bought the calls for March a few weeks ago. Sold some February options against them that expired and I pocketed that money. Then started to take a more bearish view so sold some in the money short term options just before the recent $15 waterfall in the stock. Bottom line almost recouped the entire cost of the March calls which I still have, and have 3 weeks till expiry. An initial mistake virtually completely eliminated by making option time decay work for me! But for most best sit out till we get some resolution to this horrible market climate. 

Thanks,

Joe

PS-Here is the advice I would give my own family about trading this market.