Tom Sosnoff, CEO of tastytrade (a popular option trading and education network), is of the strong opinion that chart analysis is of no use in trading stocks or options.
We vehemently disagree. Master Trader believes that trading options without using technical analysis is akin to putting your head in the sand, ignoring valuable information.
It makes no sense to be ignoring information that has a tremendous value in determining directional bias (which effects “Delta” and “Gamma” for the options traders using the “Greeks”).
Many volatility traders tell you to buy it at the worst times, not knowing how to time long and short entries with the charts.
In this video, we will discuss when to trade volatility products – both long and short – using the charts, and will explain why Contango (headwinds caused by the ETF fund manager continuously rolling VIX futures contracts to forward more expensive ones) favor selling Volatility ETFs on spikes, timed with SPY bullish reversals using Master Trader Strategies (MTS).
Although we both prefer selling options on high implied volatility, this video also challenges tastytrade’s research which suggests that selling Iron Condors when volatility is spiked, as well as its opinion not to trade front month volatility products since they are allegedly the most unpredictable.
Tastytrade has tremendous talent at crunching numbers for statistical analysis related to options strategies.
Some of which can be of some help, but when price pattern analysis is used (charts), much of it is does not relate.
Clearly, we have opposing views on the use of technical analysis in options trading. Watch the video
Master Trader welcomes Tom Sosnoff of tastytrade to be a guest on our Master Trader Live show (hosted by Greg Capra and Dan Gibby each Wednesday’s at noon ET) to discuss their opposing views in an educational format to help the many retail investors and traders.
Master Trader combines Technical Strategies (MTS) with options trading to teach investors and traders how to generate income and wealth in the markets.
All of our trade recommendations are based on how bullish or bearish we are on the price patterns that we use on multiple time frames (MTF).
We then choose either Income or Directional Option Strategies to best match our bias and trading time frame used.
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All the best,
Managing Director of Master Trader
Trading the Pristine Method — Origin and End
Chief Options Strategist
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