By keeping an allocation of cash in your portfolio, you are always be positioned to seize short-lived opportunities. Some traders enjoy operating with 50% cash so that in extreme circumstances discretionary trades can be made.
On a day like today, with equities down a percent and a flight to safety in gold I am going to take advantage of the spike in implied volatility and start selling OTM bull-put spreads on stocks that rally in March. Take a look at a couple seasonal candidates under review:
BCPC is a nice small-cap stock with strong seasonal tendencies March through early May.
West Pharmaceutical Services is another great small-cap candidate.
Stay smart and trade safe!
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