http://selfinvestors.com/tradingstocks/inspiration/trade-fear-options-straddle/ ETF, IPO & Breakout Stocks Analysis, Tracking & Research Sat, 06 Aug 2011 03:46:02 +0000 hourly 1 http://wordpress.org/?v=3.2.1 http://selfinvestors.com/tradingstocks/inspiration/trade-fear-options-straddle/comment-page-1/#comment-4803 Barry Brush Thu, 17 Jan 2008 03:50:56 +0000 http://selfinvestors.com/tradingstocks/inspiration/trade-fear-options-straddle/#comment-4803 "Right On! The problem is there, so beware. You don't put on a straddle unless there is a HIGH probability of movement. If it doesn't move; which I addressed, you will loose: but the strategy includes your attempt to limit it to no more than 15% of your invested premium with an exit strategy. Thus you retain 85% of your high probability investment for another day. Good thinking to be concerned about limiting your risk in the event of non-movement." P.S. I know some option traders who instead of exiting a play over earnings; enter a short term straddle until the report is anounced. Afterwards, they trim back the hedge so they can see around the bends in the road ahead. Thanks for reading. Cheers, 2dimes “Right On! The problem is there, so beware. You don’t put on a straddle unless there is a HIGH probability of movement. If it doesn’t move; which I addressed, you will loose: but the strategy includes your attempt to limit it to no more than 15% of your invested premium with an exit strategy. Thus you retain 85% of your high probability investment for another day. Good thinking to be concerned about limiting your risk in the event of non-movement.” P.S. I know some option traders who instead of exiting a play over earnings; enter a short term straddle until the report is anounced. Afterwards, they trim back the hedge so they can see around the bends in the road ahead. Thanks for reading. Cheers, 2dimes

]]> http://selfinvestors.com/tradingstocks/inspiration/trade-fear-options-straddle/comment-page-1/#comment-4799 Elias Rorris Thu, 17 Jan 2008 01:04:00 +0000 http://selfinvestors.com/tradingstocks/inspiration/trade-fear-options-straddle/#comment-4799 THERE IS ONE BIG PROBLEM with this strategy. Because of the upcoming event, the options are expensive. (high volatility). Upon completion of the event, the volatility drops thus rendering the options cheaper. If the stock does not move a lot, you will lose money. THERE IS ONE BIG PROBLEM with this strategy.
Because of the upcoming event, the options are expensive. (high volatility). Upon completion of the event, the volatility drops thus rendering the options cheaper. If the stock does not move a lot, you will lose money.

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