Choosing of assets for trading can take a long time, especially when it comes to options trading. Keeping this in mind, we’ve created the options screener that saves your time and helps find new trading ideas based on a simple principle – buying cheap options or selling expensive ones.
By studying various financial markets for a long time, we agreed on the need for automation of analytics. In order not to go through hundreds of assets every day, we created several indexes that let you get ready for trading efficiently and make decisions with a clear head, since most of the calculations are automatic. According to such indicators, we can assess the market volatility and find assets with a pronounced growth or decline potential as well. One of such indexes is Sigma, which is included in the full version of the OptionClue options screener.
Sigma index lets identify assets with low market volatility (flats and triangles) and high market volatility (trends). It’s applicable for a breakout trading, when the market may soon change its direction from a sideways trend condition to an uptrend or downtrend. This index also lets you find assets quickly that are already in active directed movement on the Daily timeframe. This indicator is useful both in classic trading in the stock market and in options trading.
In this article we will analyze the principles of using Sigma index in the medium-term trading, assess how many assets in the common list are noteworthy, and we’ll take the examples.