We’ve all seen it. A stock goes flat for no apparent reason, and then suddenly, it makes a giant move when a catalyst comes along. But what technique can you use to determine when a stock gets too compressed? And how do you know how big the move is likely to be before it happens? And how do you know if the eventual move will be big enough to generate options profit? The answers to those questions are what this chart will give you.

When you see the combination of compressed stocks and low-priced options at the same time, certain strategies designed to profit from explosive moves are ideal. Watch this video to see how it’s done.