Capital Ideas & Analysis

Using the screening process of a low ADX and a bollinger band within the keltner channel, we can screen for fantastic daytrading strategies through options.

Often times markets will move, then consolidate towards the close, leaving a bollinger band squeeze on intraday timeframes. this allows us to place a straddle or strangle on the underlying and take advantage of the upcoming move. enter at the close, exit on the following open.

The markets ive chosen to trade this are simple and basic. others may want more action in their lives.

Trading vehicles: For myself, I’m trading specifically the DIA, SPY, and GLD for this strategy. all of which have fantastic liquidity. volume almost always over 100, open interest almost always over 1000. markets that could potentially be on this list in the future include USO, SSO, QQQQ, IWM. as a side note, i really enjoy selling option spreads on $RUT which has great liquidity and priced highly.

This not only is a nice way to make some quick trades, but it also only requires that you be at your screen for the first and final hour of the trading session. No scanning for stocks, just check a few quick indexes and option pricing to see if a trade is set up or not. perfect for those that cant or wish not to be in from of their screen for an eternity (i fall into the latter camp).