In case you haven’t noticed, we’ve just been moving back and forth by about 2,000 points the past 20 trading sessions or so. The Nasdaq’s sitting near the same price levels it was at exactly a month ago!
That tells us there’s not a lot of movement there…
This is exactly why the stock market’s been so choppy lately, and why I’ve been warning anyone who will listen that we need to be patient.
So rather than giving you a few more story stocks, I’d figured it’d be a great idea to give you a stock market update for the end of February.
With all the headlines we’re seeing from Eastern Europe, not to mention talk of rising interest rates, volatility is shaking up the markets… making it hard for traders to lock in consistent gains.
That’s why now — more than ever before — it’s important to consider what makes any given trade a good play so you can increase the odds of locking in a winner.
So I wanted to take some time to elaborate on a question I received in the Daily Profits War Room: How wide a spread is good to play, or is it dependent on the cost of the stock?
In short, I like to look for a spread of about $0.10, but that can vary depending on the price and average volume of the underlying stock.
Let’s take a closer look at what I mean, using some options spread examples to put things in perspective…
“You are one in a million, keep it up. People like you are hard to find. Thanks”
Aloy N.
The Russell 2000 index is an index measuring the performance of approximately 2,000 smallest-cap American companies in the Russell 3000 Index, which is made up of 3,000 of the largest U.S. stocks. It is a market-cap weighted index. Many investors compare small-cap mutual fund performance with the Russell 2000 index because it reflects the return opportunity presented by the entire sub-section of that market rather than opportunities offered by narrower indices, which may contain biases or more stock-specific risk that distort a fund manager’s performance.
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