Morning Commentary Tuesday Feb 2, 2010

Both Geithner and Volcker speaking today, will market see it’s shadow and go back to hole for 6 more weeks? Possibly. I would expect the market to move one way or the other based on what they say. Still the markets are trade-able and if you have the stomach and plan for it 15 to 20 day butterflies and calendars can be placed this week for Feb expiration. Set them up as normal but be even quicker to take profits or adjust.

As a mentor to options traders I have observed the importance of a plan when income trading. This a validation of what we have been teaching but was brought into focus by seeing traders who execute adjustments and/or exit trades as planned had a better course during this quick correction in the market. Please, have a plan and when you set up for March expiration prepare for more increased volatility possibilities.

Tagged as: Morning Commentary, trading plan