I’ve been exploring when to buy puts to open positions. Some say to wait for downtrends while others prefer volatility spikes.
What methods have you found more effective? My results have been varied.
Watch for support breaks with heavy volume. When key support gets crushed and volume explodes, that’s your cue. Skip the fancy indicators. Price action and volume tell you everything. Best put entries hit when everyone realizes there’s no floor left. Most people overcomplicate this. It’s just about catching those moments when sellers completely overwhelm buyers.
Put buying works well during earnings season volatility. Focus on stocks with PE ratios above 30 near resistance. Risk management is more important than timing.
Timing puts can be challenging. Volatility spikes often give better results than waiting for downtrends.
Downtrends can last longer than expected, leading to premature entries. High volatility means larger price movements that can favor your position.
It’s important to check the VIX. When it reaches 20 or higher, that’s typically a good signal for buying puts.
Look for RSI below 30 to help time your puts effectively.
My biggest put win happened during a gap down - I bought puts right at open instead of waiting around for confirmation.
Puts work best when everyone’s way too bullish. That “this is getting ridiculous” feeling has made me more money than any chart pattern ever did.
Trust your gut when everyone else is loading up on calls.