So this is why they invented options, for times like these. Volatility will clearly soar on the opening bell. But again, there’s nothing wrong with overpaying for options in volatility terms under the right circumstances. These are the right circumstances. You can pay the absolute top in volatility and still make a very nice trade if you get the direction right. You also only risk the debit on the option if you’re dead wrong directionally. Call (or put) spreads are fine too, but not sure it’s really any difference in this particular environment than simply buying. A debit is a debit.
The one near certitude is we’re not going to sit at the opening levels. We may crash. Or The PPT may come to our rescue.
Well, we know The PPT will do something, we just don’t know if it will be enough. The plus tick rule may come back. It seems like horse out of the barn already stuff now, but who knows, at the right moment it could cause a pop.
And kudos to CNBC. Futures down 48 points, but they just told me “it could have been worse”. Terrific, very insightful.
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