Put Surprise Volatility to Work for You
So, how can you protect yourself when you are buying options in this volatile market? Try buying options on stocks that have the greatest potential for surprise volatility by looking for stocks that are particularly vulnerable to surprise news or events.
Take a look at tech stocks, overvalued stocks with a lot of hype, single-drug pharmacy stocks up for FDA review, stocks in industries that are in flux and stocks with unpronounceable names.
The higher the volatility (that is, the higher the perceived risk), the greater the premiums they will demand -- and the bigger the profits you can make.
Read more: Volatility: The Option Buyer's Secret Weapon
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