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Strategies & Market Trends : Advanced Option Strategies
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To: Henry D who wrote (310)2/11/2000 10:35:00 PM
From: Greg Higgins  Read Replies (2) of 355
 
Henry D writes:
anybody uses straddles on hi beta stocks for short term trades? if successful, which stocks?

It varies. This week it was Keane, Dell and Worldcom. I went long the Keane straddle and closed it after 3 hours for a 50% profit. I went long the Dell 35 and closed it out for a small (25%) profit after 1 day. I went long the WCOM 47 1/2 straddle and closed it out today for a small loss.

I'm not convinced that the best strategy is to necessarily use high beta stocks. The best pop is a surprise on a low beta stock which then inflates radically.

Buy the near term month, don't hold the position longer than a day or two if you're looking for directional movement due to an earnings announcement.
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