When trading options on stocks and on the stock indexes you need to take many factors into consideration. The first of course is do you believe the market is going up or down ? And how quickly do you expect the movement in the market to happen ? .Often with options you can be correct about market movement and still lose money if it's not a significant percent move or the option premium was too high. I believe right now we are in the goldilocks scenario for put option buyers. We have a low VIX index which is the volatility index used to price options. And we have a stock market that is about to have the bottom drop out of it. A scenario like this doesn't come along that often and only time will tell if this is the right time to buy puts I believe it is.
SPXW1703O2190 (2017 Mar 2190.00 Put)
LAST 7.77
CHANGE +2.14 (+38.01 % )
Chart
Price Data Table
Jan 30, 2017 @ 20:12 ET (DELAYED 15 MINUTES)
Last Sale 7.77 Tick Down
Time of Last Sale 01/30/2017 15:48 Exchange CBOE
Net Change +2.14 Previous Close 5.63
Open 6.60 High 9.53
Bid 7.30 Low 6.60
Ask 7.80 Volume 1137
Open Interest 1084 Expiration Date 03/03/2017
The March 2190 put is attractive at these volatility levels. In what I believe is going to be a huge stock market decline.
SPX1721P2040 (2017 Apr 2040.00 Put)
LAST 10.30
CHANGE +2.25 (+27.95 % )
Chart
Price Data Table
Jan 30, 2017 @ 20:16 ET (DELAYED 15 MINUTES)
Last Sale 10.30 Tick Down
Time of Last Sale 01/30/2017 12:43 Exchange CBOE
Net Change +2.25 Previous Close 8.05
Open 8.30 High 10.45
Bid 8.80 Low 8.30
Ask 9.50 Volume 275
Open Interest 126 Expiration Date 04/21/2017
The April 2040 SPX S & P 500 put with 80 days till expiration and a VIX index of 12 is very reasonably priced.
The VIX index is at very low levels making options very favorably priced to the buyer. In a significant market decline they would produce big profits to buyers.
