In order to ensure traders are entering and exiting trades for the best prices possible during surge events, Tom implements a few different options trading strategies. You can expect to primarily see the following strategies:
1. Long Call – “Green Trade”
Tom uses the term “Green Trade” to describe a simple, long call strategy. He will recommend this trade when he expects the price of the underlying stock to go up. To place a Green Trade, you will need Level 2 options clearance.
Click here to see how the Green Trade works.
2. Long Put – “Red Trade”
Tom refers to simple, long puts as “Red Trades.” He will recommend purchasing a put when he expects the price of the underlying stock to go down. To place a Red Trade, you will need Level 2 options clearance.
For even more on the Red Trade, click here.
Straddle trades are a unique options strategy that involves simultaneously buying both a call and a put on the underlying stock. Tom uses this strategy in cases where he believes the stock is extremely volatile and going to fluctuate in value extremely high or low. This allows him to take advantage of drastic movement in either direction. To place a Straddle Trade, you will need Level 3 options clearance.