What to do when the market is down 2%

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Finally! A kick in volatility! Here’s some quick advice to both investors and traders.

Investors: Don’t do anything. Relax. Stay the course. If the market volatility has you so freaked out then you need to seriously consider having someone else make the decisions for you.

Traders: Take advantage of this volatility! Here’s a few ideas . . .

  • Sell some puts. Be a contrarian and sell some puts on stocks that you wouldn’t mind owning. Stocks that have gotten away from you the past few months.
  • Sell some iron condors. With the month of May fast approaching (where the market typically does nothing), we could be stuck in a trading range for a month or two. Take advantage of that by selling an iron condor. Below is an idea of how to construct it. Of course it’s just an idea NOT a recommendation.
  • Sell some put spreads. If your portfolio is not already 90% long, then consider adding some positive deltas (bullish) by selling some put spreads.

Iron Condor

 

 

 

 

This is not a recommendation to buy or sell a certain equity or to implement a certain strategy. Please consult with a financial professional before making any decisions. Iron Gate Global is not responsible for your own investment decisions.

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Categories: Markets and Strategy.