How to Profit from Volatility in 2011

The Penny Sleuth Features: Penny Stocks, Options and High-Growth Opportunities! How to Profit from Volatility in 2011 By Alan Knuckman December 28, 2010 Dear Penny Sleuther, Most investors run away from a volatile market… but this is where a lot of options investors make their money. When reviewing positions for my Resource Trader Alert subscribers, I welcome more volatility in the market! Let me tell you why… Secure Your Own Retirement Treasure. Introducing... Nine Simple Ways You Can STILL Get Rich With Gold Even as gold soars to record new highs, a respected Harvard geologist reveals how you can STILL use gold nine different ways to get rich. Get the details on this epic profit forecast – right here. Volatility is one of the main factors for option premiums. It's a measure of movement in the underlying asset, historical or implied, based on trader's expectations. And just like regular trading, we can profit from the good old "buy low, sell high" strategy using volatility. As a trader, volatility means opportunity because of greater price fluctuations. While extreme moves in either direction may be unsettling for the public at large, a disciplined trader can take advantage of the swings with a solid money management plan. As long as the markets are moving money, there is money to be made. The measure of volatility for the stock market is the VIX, also referred to as the fear index. The current run to new multi-year highs in equities has lessened the worry that was rampant this summer. That can be seen by the decrease in the VIX from 40 to the current level at 16. As you can see from the chart, the fear index has plummeted since its springtime highs. Stocks have stabilized and moved upward — thus the VIX has an inverse action over the same period. Five Market “Wealth Quakes” Could Land You 10,720% Gains in the Next 13 Months New presentation reveals shocking 2011 predictions! These five “Wealth Quake” events could make you 10,720% richer in the next 13 months…just for starters. But you must hurry! This epic presentation expires soon. For the biggest shot at huge wealth — watch this right now. VIX is Low, Time to Go? Not Necessarily So... Volatility like price is relative, it can always go higher or lower than we may expect. In fact the VIX traded at 10 just back in 2007. While it is difficult to determine exactly what "low" means, it is very possible that the current environment could heat up with some unexpected uncertainty to move the markets. A temporary burst in volatility could provide you with the opportunity to load up when others are exiting in panic. Odds are, something around world will trigger the fear that lies just below the surface for most investors. 6 Penny Stocks to Own Right Now… Penny Stock Fortunes is giving away SIX penny stock recommendations to all new subscribers! But you must hurry because these plays could explode at any time. Click here to watch the presentation now. Patience is an important asset to options investors to get the desired overall returns. Not to complain about the rally… but a correction in some assets would be nice for entry at better levels. Gold and silver come to mind with their powerful uptrends. But neither metal offers good reward to risk at the current prices. In 2011, a shakeout to flush the metal markets is what I would like to see. Keep an eye on the VTX in the coming months and you may just find excellent entry prices for your options investments. Sincerely, Alan Knuckman How to Profit from Volatility in 2011 is featured at Penny Sleuth. The Secret $200 Retirement Blueprint Investing in Penny Stocks What Is Technical Trading Follow the Penny Sleuth on Twitter, here. Become a Facebook Fan of The Penny Sleuth, here. The Penny Sleuth, a free e-letter, offers independent news and commentary on small cap stocks, options and high growth opportunities. 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