As a former college professor, I know this time of year means that after a semester full of toil and frustration, many college students are packing up and scattering to the wind for a much-needed summer vacation. The same is true for a lot of investors and many in the finance world.

You've heard it before: "Sell in May and go away."

Is it true? What happens if you do and, more importantly, what won't happen if you're not participating in the markets (i.e., what will you miss)? As an options trader, it might mean missing out on some quick, easy profits.

Think of the stock market as a swimming pool filled with hordes of kids splashing around and having a great time — waves are created and water is thrown everywhere, even onto the folks lounging at the side of the pool.

Now, if the majority of the kids leave the pool — or the majority of investors "sell in May and go away" — and seek refuge on the sidelines, what happens? The splashing and the waves and, essentially, the fun all die down. The swimming pool becomes very calm with much less movement.

Don't get me wrong, sometimes it's nice to have the pool all to yourself. But in the investing world, more people who want to get into a trade means bigger demand and, in turn, more people you can sell it to (and bigger money for those who got in early).

Come On In, The Water's Fine!

When it comes to investing, there are all sorts of adages but most of them truly don't apply. The most-important "trend" for options traders is volatility — the splashing in the pool, if you will. Yes, volatility — the very thing that many long stock investors fear — is exactly what we thrive upon!

It's been a hard, painful lesson for many investors to learn that stock prices don't move in fixed or predictable steps — just because a stock should move a certain way, doesn't mean that it will. It's fair to say that many stocks' pattern of movement can be called "randomness," as they often move too far to the upside, or the downside, in relation to a company's real value.

Let's look at the overall market to illustrate what I'm talking about. It's been a wild ride this year, but investors reacted predictably. If the market moves too fast to the upside, then traders overreact and push it too far in the other direction.

It happens again and again, like a yo-yo.

The same thing occurs with individual stocks — they get pushed to the extremes. I know that in recent weeks, we've been lulled into a sense of security because the stock market has settled into a kind of trading range. But I, for one, hope for more volatility ahead. And so should you!

Pop Champagne When Stocks Pop or Drop

Far too often, people mistake volatility as a bad thing, but our goal is actually to buy options on high-volatility stocks. You have a limited amount of time to work with, and your best options plays are on stocks that move — ones that make big advances or declines, at that!

Why? Because...