Even with the market steadily moving higher, I’m still not backing down from what got me here. Yes, the market can continue to rise, but at what rate? The odds are leaning towards a short-term reprieve and as options sellers that is what we use to make our decisions. No guessing here. Yes, we will be wrong on occasion, but the probabilities always work themselves out over the long-term.
I’m focusing on Energy (XLE) and Silver (SLV) at the moment. Both ETFs are in an extreme short-term overbought state, so per our strategy we will go in and start selling a few bear call spreads, typically with an 80-85% probability of success.
My guess is that tomorrow will bring a few more trades for either the July or August expiration. Subscribers stay tuned!
If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, it’s free for 30 days.