By Money Morning Staff
This interview with Andrew Keene, a globally known trader and a renowned expert on options, offers important insights on how to trade during an election.
He provides everyday folks the opportunity to lock in massive profits about the same strategies that helped him boost his account to over $5 million in less than two years after he started with $200K. Andrew is a regular on CNBC, Fox Business News, and Bloomberg, and he’s a five-time published author.
We talk to Andrew in this exclusive interview about how to trade during an election, volatility, and how to position in today’s market. Enjoy!
What’s your take on market volatility around an election? What do you think really causes it – and what do you expect the market to do over the next month?
AK: Even when the stock market was rallying since March, we see the VIX (Volatility Index) staying high. Some people think that is due to the unusual options activity on calls from a large “whale.”*
Usually when stocks go higher, we see calls being sold against long stock positions, but in this case, we see calls being bought instead of sold, and that is keeping the VIX high.
I think it is too hard to be short in volatility right now, and I still think that we have more downside than upside in the next couple months.
*Hedge funds or investments banks.
What is the #1 mistake people make during an election?
AK: Most people always want to be long only in the stock market, but I think this is a time that folks need to have some long positions and some short positions as well.
Do you think your investment strategy, known as S.C.A.N., is a helpful system to follow in a volatile and uncertain market?
AK: S.C.A.N. works so well due to the fact that it works in a bull market but also works in a bear market as well. During the two years after the 2008 crisis, when we went through the worst recession since the Great Depression, S.C.A.N. helped me make millions after I started with $200K.
Since then, I have taught this trading strategy to thousands and proven, in my opinion, it is the only way for regular people to make money trading options.
Is there anything you do differently when it comes to trading a volatile market?
AK: Volatility creates opportunity, and I always trade best in a volatile market. This is because in a bull market, a trader can only make money in the long side; in a bear market, a trader can only make money to the short side.
However, in a sideways market, a trader can make money both to the long and short side.
UPDATE: If you want to know how Andrew Keene is trading during this election year, check out his latest investment recommendations here.