swing trading options strategy

Swing Trading Options Strategy

The swing trading Options strategy is an uncomplicated approach that will generate fast and secure profits. This is the best swing trading Options guide that our team at Trading Strategy Guides has used for many years to skim the market for significant returns. Here is how to identify the right swing to boost your profit.

If you’re not already familiar with Options trading, we recommend that you get started by reading our very profitable options trading tutorial which will help you understand how to trade stock options: How to Trade Stock Options for Beginners – Best Options Trading Strategy.

The swing trading Options strategy has three focal benefits:

  • The potential to experience notable profits on your initial investment.
  • The best swing trading Options can limit your risk exposure.
  • You can trade high price stocks with a very small account.

If you’re trading a small trading account, then Options for swing trading is a good strategy to leverage your initial investment. You don’t necessarily require much capital to trade with the best swing trading options as you’ll be able to trade the “expensive” stocks like Amazon, Netflix or Alphabet without having to spend big amounts of money.

The swing trading Options strategy tends to stick mostly with the basic Calls and Puts Options.

Basically, if you want to buy a stock, you buy Call Options. Conversely, if you want a more convenient way to sell a stock, the best way is to buy Put Options. Also, read the weekly trading strategy that will keep you sane.

Why Options for Swing Trading?

Swing Trading Options Strategy

The simple reason why we have chosen Options for swing trading as the main strategy to benefit from trading the stock market is because of the huge profit potential.

Everyone likes to make big profits and the swing trading Options strategy is a secure and safe investment vehicle to achieve your monetary goals.

Now …

Let’s get a little bit deeper and outline some of the more prominent principles behind the Options for swing trading.

Swing Trading Options Strategy – Buy Call Options

The swing trading Options strategy is a six step-by-step process that can be applied in ANY market. What you’re going to learn is simply the best swing trading Options.

You can look at this as simply a set of principles that can help you better understand Options trading and how to effectively apply a swing trading Options strategy.

Also, be sure to read our Simple Gold Trading Strategy here.

Step #1: Pick the Right Stocks

This immediately is your first step when looking at Options for swing trading.

Picking your stock can be a daunting task because there are countless of stocks listed on the New York Stock exchange and are available for trade. Naturally, what you want to do is to build a solid sector watchlist with the leading stocks.

Best swing trading Options

Wait for outside moves and large percentage moves in your stock watchlist and use those stocks to implement the swing trading Options strategy.

Even better, if the larger percentage move is due to some earnings reports and has a strong catalyst behind because it means the stock price is driven by strong fundamental reasons.

Step #2: Assess the Market Environment, if you want to Buy Call Options look for Bullish Trend

You got to know what type of market you’re in to successfully trade the best swing trading Options.

Once you understand what type of market you’re in that is going to guide you on what side of the trade you want to be, long or short.

Options for Swing trading

The simplest method to define a bullish trend is to look for a series of higher highs and higher lows.

Besides, determining the overall market trend you also need to assess the characteristics of your market environment: low volatility versus high volatility. This will help you later pick the expiration date of your Options for swing trading. Also, learn about the difference between options vs RSU.

Step #3: Pick your Strike Price

The next step that a swing trading Options strategy needs to give you is the strike price.

Picking the strike price can be a difficult task if you don’t know what to look for. Ideally, what you want to do is to pick an out of the money option but one that is not too far out of the money and goes into the money.

options for swing trading pdf

What is out of the money option?

According to Investopedia: "Out of the money (OTM) is a term used to describe a call option with a strike price that is higher than the market price of the underlying asset, or a put option with a strike price that is lower than the market price of the underlying asset."

Step #4: Pick your Expiration – Monthly Options

An optimal swing trading options strategy needs to give your stock enough time to get through your strike price so it can pay you out on that call option, otherwise, your option might expire worthless.

As a general rule, if your expiration time is too big, on the one hand, the risk decreases, but at the same time, the percentage gains decrease as well.

swing trading options money management

In other words, if you’re buying more time you’re going to get considerably less risk and your potential losses are going to be much smaller.

The best swing trading Options approach is to use monthly options as you get a relatively higher percentage gain.

Step #5: Optimize Entries and Exits – Buy on Pullbacks

The most important part of the best swing trading Options is optimizing your entries and exits.

As a general rule, you need to be aware that Options for swing trading requires time and you need to be patient.

Also, with the best swing trading Options, you can afford not to have the best type of entries on some of your swing trades because as long as you’re patient you’re going to be able to get cheaper prices.

how to trade weekly options for income

If you’re buying call options, one trade tactic you can use to optimize your entry is to buy on pullbacks.

You can use our trade tactics on how to trade pullbacks here: How to Profit from Trading Pullbacks.

Also, always define a maxim stop loss after you bought an Option and align your take profit with where you think the market will be before your option expires.

Step #6: Manage the trade

During periods of low volatility, you want to reduce your position when doing Options for swing trading.

Best swing trading Options

If you still believe in your trade, and you think you need more time, just roll your Option through to the following month. This is what the smart money trade so they don’t lose out because of time decay.

*Note: The time decay is simply the ratio that measures the changes in an option’s price relative to the decrease in time to expiration.

The most profitable option trading strategy needs to be suitable for executing both Put and Calls options.

*Note: Above is an example of a buying call option using the options trading tutorial. Use the exact same rules – but in reverse – for buying a put option trade.

In the figure below, you can see an actual buy put options example using the best swing trading Options.

how to trade weekly options for income



The swing trading Options strategy is a powerful Options for swing trading, however, like any other strategy, it does require some knowledge of how to use it properly. We hope that our best swing trading Options will help you generate steady profits.

There are many opportunities to make money with Options for swing trading because they can be very profitable, and are a much safer way of trading than simply trading stocks. You can also take our Trader Profile Quiz.

The day-to-day fluctuation in the stock market tends to shake a lot of people out of their trades, and the best swing trading options tend to smooth out that price action a little bit so they tend to reflect a little bit more stable trading opportunities. Also, read the Best Binary Options Strategy.

Thank you for reading!

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swing trading steady profits

With over 50+ years of combined trading experience, Trading Strategy Guides offers trading guides and resources to educate traders in all walks of life and motivations. We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more. We provide content for over 100,000+ active followers and over 2,500+ members. Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow.