Buying Puts And Calls With PROVEST by Jay Kappel
The second article in this series discusses the details of the
PROVEST strategy and how you can apply it to trade calls and/
As discussed in the first part of this series, several
key factors should be considered in determining
the best option trading strategy to use at
any given point in time for any given security.
Likewise, these criteria can also be used to zero in on the best option or options to trade in executing a
particular strategy. Selecting the proper strategy involves
knowing what to look for in terms of the following variables:
Time left until option expiration
The skew of implied volatility across strike prices
and/or expiration months
Timing of market price movement.
The PROVEST option trading method criteria were developed
to identify specific criteria in each of these key areas.
The primary factors and key considerations are summarized
in Figure 1. In this installment we will look at a specific
trading strategy buying naked calls or puts and how to
use the PROVEST criteria to identify trading opportunities.