With IV so high across the board, what types of underlyings should investors be looking to trade?
We have to consider account size, risk tolerance, and desired daily P/L as our metrics that determine the types of underlyings to trade and the strategy to employ.
When looking at “types of underlyings” we have two generic classifications: individual stocks and ETFs. For strategies: we have defined and undefined risk trades.
Ultimately for lower risk, lower P/L and smaller accounts, investors may consider defining risk or trading ETFs as opposed to individual stocks. On the flip side for higher risk, higher P/L and larger accounts, undefined risk trades and individual stocks may fit better.