Trin

I use this as a short term over bot over sold indicator for all my options trades.


Reprinted here with permission.

 

Please be more explicit on how you use this graph to inform your options trading decisions.

 

If the market is oversold than I would tend to look at neutral to bullish plays, if the market is over bot then I would tend to look at neutral to bearish plays. Or to put it another way....say It's 2 or 3 weeks from expiration and I'm looking to put on some credit spreads. The TRIN is a very short term indicator, if it's showing that the market is overbot then I'd be looking at some credit call spreads and a UL that also looks to be overbot. If I'm looking at some potential plays in covered calls... I tend to do it when the market is oversold.

 

Thanks