The stock market has been stuck in a tight range for a while now, and it’s been a challenge for traders. With minimal movement, it feels like the market’s not going anywhere.
And judging by open interest, I see market makers defending the 6,000 level in SPX going all the way into monthly options expiration on June 20…
So we could be stuck in this range all the way through next week.
If you’re like me, you’ve probably struggled to keep positions open or figure out how to profit from a market that doesn’t seem to want to budge.
Here’s how to adapt and make the best of a stagnant market.
The Tight Range Trap
We’ve all been there… watching the market hover with barely any movement. It’s frustrating, especially when you’re used to more volatility and larger price swings.
This tight range has been dragging on for a month, and it’s not easy to trade in. If you’re trying to hold a position, it feels like you’re wasting time watching the market go nowhere.
In situations like these, you can’t expect to make big wins on the daily unless you adjust your approach.
When the market isn’t moving, it’s easy to feel like there’s no opportunity. But you can still find profitable trades by looking for different types of setups that thrive in low-volatility environments.
For instance, I’ve found success with short-term options, like buying cheap calls and puts, or exploring quick flip trades. These are all about being nimble and making small, calculated moves, rather than waiting for the big market shift that isn’t happening anytime soon.
And of course, we’ve been selling near-daily credit spreads in my 4PM Payouts strategy!
Adapting Your Strategy
In a low-volatility market, you have to get creative. You need to adjust your trading strategy to the conditions you’re dealing with. Don’t try to force big moves when the market just isn’t cooperating.
Instead, look for opportunities that let you capitalize on small, incremental changes.
One of the best ways to handle this market is to trade with a shorter time frame in mind. This could mean day trading or focusing on trades with expiration dates just a few days out.
The key here is to avoid getting caught in positions that require big market shifts to be profitable. Shorter-term options allow you to take advantage of smaller moves without the risk of holding through stagnation.
Additionally, look at cheap options or small positions in stocks with high short interest. When stocks are heavily shorted, they’re more likely to experience short squeezes.
That could be an opportunity to make a quick profit, even in a market that’s not moving much overall.
In the end, the market isn’t always going to give you the big swings you want. But by adjusting your strategy to the low-volatility environment, you can still find ways to make consistent gains.
You just have to be patient, precise, and ready to move when the market offers even the smallest opportunities.
Order Flow:
This is for informational and educational purposes only. These are not official alerts issued by Lance, but rather some interesting orders picked by the team at Lance Ippolito Trading.
When you look at these plays, always take the market maker move into consideration.
You can be right on the direction but still lose money if the stock doesn’t move enough. That’s where the market maker move comes in clutch.
With puts, they’re often downside hedges in case a stock tanks, especially around earnings. The further out of the money they are, the more likely they are to be hedges.
Also be sure and check when the company’s earnings date is because many of the plays we post here are centered around earnings!
And finally, always remember the golden rule when it comes to buying calls: Buy dips, sell rips — and don’t chase!
If a stock’s moved a ton already today, maybe wait for a pullback.
There is inherent risk in trading. Trade at your own risk.
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
The team at Lance Ippolito Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. I’m Targeting a 50% Return This Week
Learn the special options setup that lets me shoot for outsized gains of around 50%…
