Fold Line Strategy
- Thread starter crashy
- Start date
wayneL
VIVA LA LIBERTAD, CARAJO!
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- 9 July 2004
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Interesting Crashy!
If I am reading this right you are using bought straddles as a daytrade/very short term strategy?
This seems to be even more appropriate for US stocks which tend to have greater daily ranges.
...and thanks for posting that.
Cheers Wayne
If I am reading this right you are using bought straddles as a daytrade/very short term strategy?
This seems to be even more appropriate for US stocks which tend to have greater daily ranges.
...and thanks for posting that.
Cheers Wayne
I have used it a few times, the appeal to me is the limited risk aspect. Time decay is the ONLY problem you face. You will lose 2 or 3 percent overnight, but can easily get many times that back when the stock moves. or you can accept a 5% max loss for a 3 day trade. Its not a keeper thats for sure.
Where an announcement is due, a large move is highly probable, and coupled with the limited risk aspect, this strategy is unbeatable for that specific situation. But of course, the stock isnt always near the equilibrium point when you want it to be.
I work out my straddle values, and place orders but my broker says "you are nowhere near the market" and I think.....not yet it isnt, but when the stock hits XXX price it will get filled. And I have been filled.
SGB 2150 Nov is one that broke my heart. Paid 68c. sold @ even 3 days later.
Take a guess what it got to by expiry?
Where an announcement is due, a large move is highly probable, and coupled with the limited risk aspect, this strategy is unbeatable for that specific situation. But of course, the stock isnt always near the equilibrium point when you want it to be.
I work out my straddle values, and place orders but my broker says "you are nowhere near the market" and I think.....not yet it isnt, but when the stock hits XXX price it will get filled. And I have been filled.
SGB 2150 Nov is one that broke my heart. Paid 68c. sold @ even 3 days later.
Take a guess what it got to by expiry?
