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The ADX Strategy for Choosing Strangles vs Directional Trades

Most traders open a chart and ask which way the stock is going. The better first question is whether it is going anywhere at all. A sideways stock and a trending stock call for completely different trades, and guessing wrong is expensive. Knowing which one you have is the first step to finding trading opportunities. In this video I show you the ADX strategy we use as a filter inside Option Samurai. The Average Directional Index is a technical indicator that measures trend strength, while its DI+ and DI- lines tell you which way the trend is leaning. You will see the filter on a short strangle scan with the Sideways preset, the Advanced View when you want your own thresholds, and the indicator under the price chart in Research. Then the full process on a real idea: a short strangle on Oracle, whose ADX has been below twenty for weeks, and the timing lesson that comes with it - you want to consider the trade right when ADX crosses below twenty, not after. Finally, our free ADX backtest on Oracle: after a quiet reading, Oracle's average move over the next ten trading days was about 0.5%, against close to 0.9% after any day. As always, what you see on the screener are candidates to investigate, not finished trades. In this video you'll learn: 1.⁠ ⁠What ADX tells you about trend strength, and what DI+ and DI- add 2.⁠ ⁠How to use the ADX filter in a scan, Basic and Advanced View 3.⁠ ⁠How to go from scan candidates to a real short strangle on Oracle 4.⁠ ⁠How to check any stock with the free ADX backtest ⸻ About Option Samurai Option Samurai helps you find better trades, faster. Our scanner and tools are built for serious options traders who want clarity, speed and an edge. The ADX filter is one of five new technical indicators you can combine with everything else you already screen for. ⸻ 🚀 GET STARTED 🌐 Try it free for 2 weeks: https://optionsamurai.com 📖 Backtesting the ADX Filter on Any Stock [Free Backtest File Included]: https://optionsamurai.com/blog/backtesting-adx-filter/ 📖 ADX indicator docs: https://samurai.froged.help/docs/en/16236094-average-directional-index-adx-indicator ⸻ 👍 Like this video if it helped you 🔔 Subscribe for more options trading strategies and tools 💬 Which indicator should we cover next? ⸻ Chapters:

Company News

Option Samurai Q3 2026 Version - Watchlists, Technical Indicators and Alerts

6 min read

Our biggest release this year: smart watchlists, scheduled email reports, five new technical indicators, industry filters, and a redesigned blog.

Research

Backtesting the ADX Filter on Any Stock [Free Backtest File]

10 min read

See what ADX sideways, bullish and bearish readings actually did on a stock over the next two weeks, and how to spot a false edge. Free backtest file inside.

Trades

Trade Idea - Bear Call Spread on NOW

3 min read

A bear call spread on NOW: short $172 call, long $182 call to cap the loss at $971. RSI 74, no earnings before expiry, 17% buffer to the short strike.

Blog Categories

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Blog List

Education

What Is Rho in Options?

6 min read

Learn what rho means in options trading, how interest rates affect option prices, and when rho matters most. Explained with clear examples for calls and puts.

vega
Education

What Is Vega in Options?

7 min read

Learn what vega means in options trading, how implied volatility affects option prices, and how to use vega for long and short strategies.

theta
Education

What Is Theta in Options?

6 min read

Learn what theta means in options trading, how time decay works for buyers and sellers, and how to use theta to measure portfolio risk.

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Research

Trading Earnings Events with Options - A Backtested Strategy

13 min read

After an earning event, stocks can experience a sudden price change depending on the way the market interprets the company's performance. This can be an opportunity for traders to capitalize on...

Extrinsic Value of Options
Education

A Simple Explanation of Extrinsic Value in Options

9 min read

You often hear that the value of an option tends to decay with time, but why does this happen? To understand the concept, you will need to learn more about the extrinsic value in options. This...

exotic_options_featured
Education

Exotic Options - What Are They and How Do They Work?

5 min read

Exotic options are not your typical financial tools. These customized derivatives offer unique payment structures, flexible expiration terms, and distinct activation mechanisms. Primarily traded...

Featured Videos

New Tickers by Email? Automate Your Options Scanner Now thumbnail

New Tickers by Email? Automate Your Options Scanner Now

Your scan already turns your rules into a list of trades worth a closer look. With Option Samurai alerts, those same rules keep working after you close the laptop. Get an email when a new ticker enters your scan, or have the full results sent to you on the day and time you choose. In this video I show you how to set up Monitoring Alerts and Scheduled Reports inside Option Samurai. I'll turn on alerts for "Weekly calls that will explode in value with 1 ATR move", then schedule a Monday report for "Wheel candidates". You'll see how to choose between CSV and HTML reports, and where to pause, reactivate or delete your alerts when your routine changes. In this video you'll learn: 1.⁠ ⁠How to activate alerts on saved and predefined scans 2.⁠ ⁠When to use a new-ticker alert and when to schedule the full results 3.⁠ ⁠How to set the day, time and format of your reports 4.⁠ ⁠How to manage your alerts and reports in one place ⸻ About Option Samurai Option Samurai helps you find better trades, faster. Our scanner and tools are built for serious options traders who want clarity, speed and an edge. Alerts give your scans an extra way to work around your day, with trade ideas delivered straight to your inbox. ⸻ 🚀 GET STARTED 🌐 Try it free for 2 weeks: https://optionsamurai.com 📖 Monitoring Alerts: https://samurai.froged.help/docs/en/69598882-monitoring-alerts ⸻ 👍 Like this video if it helped you 🔔 Subscribe for more options trading strategies and tools 💬 Which scan would you want to receive alerts or reports from? Let us know in the comments.

Reverse DCF Reveals What's Priced Into Any Stock thumbnail

Reverse DCF Reveals What's Priced Into Any Stock

Most traders start with a growth guess and hope the market agrees. You pick 14% because it feels right, you run a valuation, and you get a fair value that matches your bias. Then price does something else entirely. What if you flip it? In this video I walk you through reverse DCF in Option Samurai using Adobe as the example. Instead of guessing growth, you read what growth is already priced in, then compare it to what you believe is possible. You will see exactly how to: - Load the template and plug in price, cash flow, and assumptions. - Read the implied growth rate priced into a stock right now. - Compare your growth view vs what is priced in. - Spot the gap and turn it into a trade idea. - Choose the right template version for a single stock, a watchlist, or an options trade. Instead of arguing with price, you start from what price is telling you. ⸻ About Option Samurai: Option Samurai helps you find better trades faster. Our scanner, watchlists, and Excel plus Google Sheets integrations are built for serious options traders who want clarity, speed and an edge. ⸻ 🚀 GET STARTED 🌐 Try it free: www.optionsamurai.com 📖 Standard template: https://optionsamurai.com/blog/reverse-dcf-template/ 📖 Watchlist version: https://optionsamurai.com/blog/reverse-dcf-watchlist-template/ 📖 Options trade version: https://optionsamurai.com/blog/reverse-dcf-option-strategy-template/ ⸻ 👍 Like this video if it helped you 🔔 Subscribe for more options trading tips and tools 💬 Drop a comment if you have questions or ideas for future videos ⸻ 0:10 What a normal DCF gets wrong 0:36 Reverse DCF: what growth is the market pricing in? 1:01 Case study: Adobe 1:19 The inputs (cash flow, terminal growth, discount rate) 1:45 The growth assumption 2:05 Hunting for the implied growth rate 2:30 The market prices -7% a year: is that realistic? 3:10 When disagreement becomes a trade 3:26 Grab the template

Deep ITM LEAPS Strategy: How 50 Percent Becomes 109 Percent? thumbnail

Deep ITM LEAPS Strategy: How 50 Percent Becomes 109 Percent?

Most traders buy a hundred shares and never do the math on what they are actually paying for. Ten thousand dollars of stock. Full risk on every dollar. And a return measured on money you did not need to spend in the first place. Owning the shares feels like the only way to own the stock. Except, this is not true. In this video I break down how one deep in the money call replaces 100 shares for less than half the money. You will see the full math on a $100 stock why a 90 delta option moves like the shares while time decay barely touches it and why the worst case loss is a number you know before you enter. You will get the seven rules for buying these options the right way from picking the delta zone to sizing the trade like the shares it replaces and where the money you saved should actually go. I will show you the scan I built for myself inside Option Samurai to find deep ITM calls and how to manage the position when it wins by rolling the strike up locking the profit with a put or doing nothing on purpose and when it loses with one question about your original thesis. Finally you will see the same map flipped with deep ITM puts and why the short squeeze math that keeps most traders away from bearish trades does not have to apply to you. In this video you will learn 1 Why one contract at 90 delta replaces 100 shares for less than half the money 2 The seven rules for buying deep ITM options and why position sizing matters more than strike selection 3 How to scan for deep ITM calls inside Option Samurai with your own delta breakeven and max loss filters 4 Three ways to manage a winner roll up lock the profit or do nothing on purpose 5 How deep ITM puts flip the whole map for bearish trades with a capped loss and no squeeze math ⸻ About Option Samurai Option Samurai helps you find better trades faster. Our scanner and Excel plus Google Sheets integrations are built for serious options traders who want clarity speed and an edge. The scan shown in this video runs live inside the platform with the exact filters from the video so you can find deep in the money calls and puts that fit your own rules before you commit capital. ⸻ 🚀 GET STARTED 🌐 Try it free: https://optionsamurai.com ⸻ 👍 Like this video if it helped you 🔔 Subscribe for more options trading strategies and tools 💬 Comment which strategy you want us to cover next - we read every one and plan new videos from them ⸻ Chapters 0:45 What "deep in the money" actually means 1:05 The math justifying the trade 3:29 The 7 rules for buying deep ITM options 5:01 What the money you saved can do (and the leverage question) 6:02 The scan inside Option Samurai 6:57 Managing a winner 9:09 Managing a loser 10:03 The bearish flip: deep ITM puts

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