The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone, Kirk here again at Option Alpha and welcome back to the daily call. Today, we’re going to be talking about how to trade options with the Bollinger Bands indicator. If you get started trading options or if you get started trading stocks, even Bollinger Bands is going to be one of those key technical indicators or technical analysis studies that you might run across early on. And so, I want to describe not only what Bollinger Bands are and what happens, I guess and what they are and how they work, but also how we might use them in options trading. First thing, Bollinger Bands were obviously developed by a famous technical trader. His name was John Bollinger and basically, what he did is he plotted a simple moving average alongside of a stock which is nothing new, but then he used standard deviation levels, so sometimes two or three standard deviation levels above and beyond that simple moving average using volatility. It was a very simple concept and that’s why I think it’s actually relevant to op