The volatility since August 2015 has been almost unrelenting. Since late August the number of days the VIX Index has been below 20 is less than 15%.
Since the start of 2016 there have been only 5 trading days where the VIX index closed below 20 and no days has it closed below 19 as of Friday Feb 26.
71% Of All Trading Days Have Seen High Volatility
This has meant many wide daily swings and whipsaws in the market. From Jan 4 to Feb 26 there have been 27 days where swings in the VIX have been more than 6%.
Considering there have only been 38 trading days between Jan 4 to Feb 26 this means 71% of all trading days have seen wide changes in volatility which means wide price changes in stocks and the indexes.
For many investors selling options for income is difficult in highly volatile markets. Yet it is this same volatility that drives up option premiums and assists in providing larger profits for investors.
The key to profiting in present markets is having the tools to assist investing in a market with high volatility. One of those tools which I have used since 1985 is a spreadsheet designed to assist in removing the element of emotion from trading and advising when to close trades.
Teddi’s Closing Early Spreadsheet
This strategy article for members, gives a download link to a spreadsheet I developed in 1985 when Excel was first introduced. From there I have modified it many times including during the crash of 1987 and throughout the 1990’s and into the bear markets of 2001 to 2003 and 2008 to 2009.
This strategy discussion article is 3700 words in length and 11 pages will be needed if printed. This strategy article explains how I use this spreadsheet to pinpoint when to close trades to lock in profits or escape from large losses.
FullyInformed members can directly access this investing tool designed for periods of high volatility through this link.
Non-members can join FullyInformed to gain access to this tool through this link or to read about the benefits of a membership.
Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.