September was the first negative month for the markets since March. In this episode, Brandon and Christine discuss with our guest, Jean-Christophe, about how to find some sanity in this insane market and protect yourself against excessive loss.
Topics Discussed
06:08 – Week in Review
- Consumer confidence: 101.8 V 90.0E
- Q2 annualized GDP: -31.4% V -31.7%E
- Initial jobless claims: 837K V 850KE
- Unemployment rate: 7.9% V 8.2%E
- Change in nonfarm payrolls: +661K V +875KE
- Market drops Friday from news of Trump testing positive for COVID19
15:19 – Finding Sanity in an Insane Market
- The difficulty of predicting where the market is going
- Valuations are way over-extended
- Why options are better than stocks in this market environment
- The value of playing it neutral
- If you’re bullish, it’s better to sell OTM puts than to buy the stock
- The danger of unrealistic expectations
- Stress-testing your strategies
- Useful resources for learning options
- Make sure your account is large enough to trade options effectively
- How to hedge your account with puts
- You have to love it to succeed
Resources Mentioned
- Historical option price movement: optionslam.com
- Option Volatility & Pricing: Advanced Trading Strategies and Techniques, by Sheldon Natenberg
- Market Measures by TastyTrade
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