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The Nasdaq is flirting with correction territory as it's down nearly 9% in less than a week.
The sharp downturn has volatility roaring back into markets and sending weak-kneed investors heading to the sidelines. The VIX is up 18% in the same time frame.
But far from a panic-inducing downturn, this shakeup could play out very nicely for traders. You see, we've been predicting volatility would increase around this time of year, and it's healthy for markets to cool off a bit amid a runup. That doesn't mean you have to stop making money.
Money Morning Quantitative Specialist Chris Johnson has a great way to deal with the surging volatility headed our way. But he is not going to just defend against it. Rather, he has an options strategy designed to make you real money just as volatility expands.
Remember, volatility gets a bad rap because most people can lose money, and probably sleep, when it grows. That's because they are trading the wrong things when it happens. Options traders happen to love it because volatility means prices are moving. That means more profits.
You may think that the only way to profit from volatility is to buy a put or call option on your favorite stock and hope you picked the right one. What if there was a way to profit on raw volatility, no matter which way the market moves – higher or lower?
Well, there is!
And using this options trading strategy could be your ticket to big paydays this fall.
Here's how to use it…