This One Number Tells You How to Trade Any Stock
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Most options traders ask one question before they pull the trigger: Which direction is the stock going?
If you ask our Chief Quantitative Strategist Mike Carr, that’s the wrong question. And knowing the right one to ask can be the difference between a winning options strategy and a losing one.
Before joining the team, Mike served in the Air Force, worked at the Pentagon and the NSA, traded on his own for years, and literally wrote the book on relative strength investing. He’s been building quantitative systems his entire career – whether built for trading or for guiding nuclear missile paths.
When he looks at an options trade, the first thing he wants to know isn’t whether a stock is going up or down. It’s whether the options themselves are worth buying at all.
That distinction matters more than most traders realize. When volatility is high – the way it was during April’s market selloff – options can cost two or three times what they’d normally be worth. You can be right about the direction and still lose money because you overpaid for the contract before you even started.
Mike solved that problem with a single number unique to TradeSmith’s Predictive Alpha trading software: the VolScore.
And in our latest interview, he’ll walk you through exactly how to use it alongside our Predictive Alpha forecasting algorithm.
Watch my full interview with Mike here.
What you saw today was the product of years at work here at TradeSmith.
We’re building hedge fund-level tools for everyday investors – with the VolScore, our Predictive Alpha forecasting algorithm, and the software that ties them together.
Our system scans thousands of stocks every trading day, runs the math, and flags the setups where the data lines up.
No matter if you’re a veteran options trader or are committed to learning, Predictive Alpha Options have everything you need to set you up for success.
Learn more about Predictive Alpha Options from our CEO, Keith Kaplan, right here.
To building wealth beyond measure,
Michael Salvatore
Editor, TradeSmith Daily