KEEP IT SIMPLE

there's a pretty big misconception (not for everyone, but to some) that when the stock market goes up, traders make money. and when the stock market goes down, traders lose money.

it could be true, but not necessarily.      ++options=stock options++

huh?

there are so many different types of traders. traders trade different things and look for different time frames. some people trade apple stock, some people trade bank of america options, some people trade bonds, some people trade currencies, some people trade coffee. some traders look for moves in the next 2 minutes, some traders look for moves in the next 2 years.

it seems like for the past couple months, all the headlines sound similar to "market soars to all time highs" or "S&P surges to break all time high..."    blah blah blah

yeah, that might be good for some traders, but it's definitely not favorable for how and what i trade. i trade equity options (mostly bank of america options and on a very short time frame, minutes). Equity options is basically the equivalent of insurance for stocks. just like any other type of insurance. people buy insurance for peace of mind. when people are worried, they buy insurance. when there is no fear or doubt, people don't want to buy insurance. for me, the more Options volume the better, that means more opportunity. that's why, options traders love volatility. they love fear/uncertainty. when there is fear/uncertainty/volatility in the market, the more action there is. when the market does nothing but go up (the state we are in now), there is no fear, no one is worried and therefore doesn't need/want insurance. 

just like if you're selling tornado insurance. if there hasn't been a tornado in the area in 10years, people aren't going to buy insurance because there is no fear. buuuuuut, if there's a tornado warning 3 weeks in a row. hmmmmm, people might be lining up. opportunity!

so basically, when stocks go up and there's nothing to fear/worry about, no one wants to buy stock options. buuuut, if we get some fear into the market, and we see a big pullback/small market crash, then suddenly, people start to worry and will look at options to hedge/speculate. so basically, for my style of trading, i prefer the stock market to crashhh. not saying bull markets are outright bad, just not FAVORABLE