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Scalping

Searching for Opportunities (2 of 6)

Scalping

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

This is the second segment in a planned six part series on scalping, covering the most important things to know to give yourself a chance to be profitable while staying engaged in the markets. There is something here for everyone.

A table of all the 6 segments in the series was displayed. Each was briefly introduced. Another table of two tiers of scalping products was displayed. The first tier included the /ES (S&P 500), /NQ (Nasdaq) and /ZB (Bonds). The second tier included liquid underlyings such as SPY, AAPL, NFLX, AMZN, TLT, QQQ, TWTR,FB, /NG, /GC, /6E, /ZN, /CL and /VX. The importance of liquidity was stressed.

Tom and Tony mentioned that the market decides whether it is a good scalping opportunity day, not you, and part of that is understanding price extremes. They cautioned against forcing trades.

Another important factor is intraday volatility and the relationship between the implied expected move and the actual move. A table of the future products and their average five year actual intraday range in ticks and dollar amount was displayed. The actual move was 60% less than the “expected move” which means there is 40% price move excess in every single day that are priced into the futures and options markets. A slide discussing pairs trades was also displayed.

Watch this segment of "Scalping” and the rest of this compelling series, with Tom Sosnoff and Tony Battista to better understand how to learn how to scalp futures and stocks and how this can improve your overall engagement of the markets.

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