Today 23/10/2008
I just want to give a brief comment about Writing Options on Volatile market. If you read my last article, you must be very careful to be an Options Writer on this market condition. Yes, you may get very rich premium, however, the volatility index (VIX) is so high currently on the 70 level. Anything can happen, i.e big rallying on good news and sell off on bad news. This is always happen on Bear Market, very strong move on either side.
Looking at one hour chart, the market is consolidating. A triangle is formed by higher low and lower high. Buyers and sellers are consolidating, and this can bring a potential breakout when it is approaching 2/3 of the triangle.
So, I suggest to wait and see a breakout before you put any position. The breakout can be upward or downward, regardless of bearmarket condition.
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