Price level selling - the probability on your side!
If you don’t know about options, how can you make money on the stock market or on the market of any underlying product, for example on the Forex market?
Let's read my presentation about price level selling, which offer you a good opportunity to earn a 66% probability on markets!
Published on: Mar 4, 2016
Transcripts - Price level selling - the probability on your side!
"Price level selling" - the probability on your side!
How can you make money?
If you don’t know about options, how can you make money on
the stock market or on the market of any underlying product, for
example on the Forex market?
Directionally, of course, either with short or long direction.
There are no other possibilities.
If the underlying product moves sideways, you do not
earn anything, you may even suffer losses (capital cost -
loss of interest).
Everyone who simply trades underlying products, accepts this.
But options traders know that they can earn money in a
much more flexible way. When it comes to shares, if you bet
on long, you suffer a loss with short or sideways directions.
That is, two of the three possible directions make losses.
Let's accept that sideways movement makes a loss as well,
because it is essentially lost interest income.
So, with this in mind, a stock trader
can make money in only one out of
three directions, this is a
probability of 33%, as far as the
direction is concerned.
How can you reach a
Options traders know that they can achieve much better probability.
There is a wide variety of strategies for doing so. One of these
strategies is the one I call "price level sale".
In this case, I sell a price level that is adjusted to a strong
support or resistance level.
I formulated this for my students as follows:
"You do not have to know your target price and when it will
come true. It is enough to suspect the price above or below
which it will not be at maturity - that are major support and
resistance levels ..."
Let's look at two examples!
XYZ shares are at 50 and the price bounced 2x from
this price level, because a strong support held it.
Now, I sell the 50-level and play for a price of 50
or above at maturity. In other words, it either moves
sideways or rises and I make some profit.
XYZ shares bounced off from the 100–price level for
the second time. In this case, I sell the 100
level and to play for a price of 100 or below at
maturity. In other words, it either moves sideways or
falls and I earn some money.
You can be profitable in 66% of
Thus, using these two strategies, I make a profit from two
of the three directions, that is, in 66% of the directions!
Direction probability needed for a stock
trader to make some profit is 33%,
while it is 66% for an options trader.
Think about it, you can be profitable in 66% of the
directions, ie. you can earn money in two of the three
Stock traders make a profit only in one direction - but you
do not need get caught up in the world of shares :)
Feel free to ask me!
My webpage: http://www.optionsrules.com/
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