Today, I want to dig into a unique trading strategy I recommend for my paid subscribers from time to time.
It's a move that allows you to lower your risk and cost – always something to shoot for – and still take those same massive profits we're always looking to grab.
It's called a "butterfly spread" trade, and it's perfect to use when the markets are experiencing high volatility like they are now.
Now, I can hear what you're thinking: "High volatility?! Tom, the S&P 500 is at record highs right now." But always remember, volatility is up and down movement; just because we're at record highs doesn't mean there's no volatility – we're just going through upside volatility.
Volatility of any kind can lead to an increase in option prices, which could make it tough to stick to one of my most important trading rules: I only enter trades that are $500 or less.
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.