Iím just not finding a lot to work with right now. Many stocks appear overbought, but are not offering the right setups for bearish trades. Straddles would be an ideal trade strategy, as they can benefit if the underlying continues rising, and especially if the underlying falls sharply.
The problem with straddles right now is the options have significant premiums in their prices due to high Implied Volatilities. The underlying stocks would have to move significantly for many straddle trades just to break even.
Elevated IVís also makes many other option strategies low probability, high risk. Conservative trades like covered calls on the best stocks are good trades until the market figures out which way it wants to go.
Over the past two weeks, the S&P 500 for instance has traded within a 2% range
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