Options for Swing Trading


  • Pages: 348
  • Format: PDF
  • Published Date: 2013


Options for Swing Trading explores the many aspects of swing trading, but with an added twist. Most swing traders use shares of long stock at the bottom of the swing, buying and waiting for the price to rise and then selling. Some, but not all, will also short stock at the top of an exaggerated swing and then buy to close at the bottom.

In this transaction, the normal “buy-hold-sell” is reversed. The trader borrows stock from the broker and then sells it, waiting for the price to decline so it can be bought to close at a lower price— the sequence becomes “sell-hold-buy.” However, shorting stock is expensive and carries a high risk, and therefore many swing traders work only one side of the trade, entering with long stock and then selling when prices rise.

Using options in place of stock, swing trading is safer and more flexible. Traders using long options can make bearish moves without taking on short-side risks, for example. This is only the most apparent benefit of swing trading with options. There are many more.

Options for Swing Trading explains and contrasts options with stock in a swing trading program. It demonstrates how reversal signals and confirmation are recognized. And finally, it provides a number of methods for using options in a swing trading program.


  • Options: Trading Basics
  • Swing Trading: The Basics
  • Dangerous Waters: Risk Inherent in Comprehensive Swing-Based Strategies
  • Marginal Potential: Leverage Limitations in Swing Trading with Stock
  • Elegant Solutions: Options to Address the Risk and Leverage Issues
  • In and Out: Entry and Exit Criteria for Swing Trading
  • Powerful Timing Tools: Expanding Swing Signals with Candlestick Reversals
  • Flexing Your Muscle: The Power of Options Close to Expiration
  • Swings Maximized: Timing the Swing with Ex-dividend Date
  • Strategy # 1: Long-Option Approach, a Basic Solution
  • Strategy # 2: Long/Short-Call Strategy, Uncovered Short Side
  • Strategy # 3: Long/Short-Call Strategy, Covered Short Side
  • Strategy # 4: Long/Short-Call Strategy, Ratio Writing on the Short Side
  • Strategy # 5: Long/Short-Put Strategy
  • Strategy # 6: Short-Option Strategy
  • Strategy # 7: Synthetic Option Positions Strategy
  • Strategy # 8: Multiple Contracts and Weighting with Ratio Calendar Spreads
  • Strategy # 9: Expanded Iron Butterfly Swing Trading