SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : 300% risk free annual return with options
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Alastair McIntosh who wrote (1)8/9/1999 4:59:00 PM
From: Keith Lenart  Read Replies (1) of 10
 
Wow... the only thing that I can say is STAY AWAY from options until you understand what you are doing. I mean no disrespect, just trying to save you (and any readers of this thread) hard earned cash.

Here is the problem with your scenario. The stock must close exactly at the strike price of the options you sold for this to work. The fact that you are long and short equal amounts of stock is irrelevant. This position is a NAKED STRADDLE which CAN and WILL lose money if the stock moves away from the strike price an amount greater than the two option premiums combined.

Good luck, but trust me, this IS NOT a riskless strategy (nor is any except for pure arbitrage.)

Keith
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News