Video lesson: you are missing a key part of the puzzle...

Hey,

This is a free trade idea I put out to the X community earlier this week.

It should give you a proper understanding on how I go from ticker on the watchlist to an actual trade.

So, the focus is on IBM:

The stock recently smashed through its put wall on the downside and that put wall hasn’t rolled lower. 

So what that means is the options landscape is not shifting down with the price. That’s important. 

Normally if there was going to be continuation to the downside you would expect this put wall to roll lower to lower levels because people who have bought puts that have gone in the money are going to monetise them and then roll them down to even lower strikes because they think there’s more downside in the stock. 

When the stock is getting hit but the options landscape isn’t shifting with it, you have to ask whether the structure is changing even if price hasn’t. 

The fact that the put wall has been holding is somewhat supportive. 

However, that’s not really enough for me. 

And that’s where most people get this wrong: they focus on the move, not the positioning. 

If you’re chasing the move instead of understanding the "under-the-hood" vol dynamics, you’re missing a key part of the puzzle.

That's why I put together the video below where I explain in much more detail my thinking process behind this trade.