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Strategies & Market Trends : Advanced Option Strategies
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To: OX who wrote (296)2/1/2000 6:00:00 PM
From: tyc:>  Read Replies (1) of 355
 
50 day Moving averages and trading bands are not my idea. I have a feeling that is what Bollinger bands are all about. In the Black Scholes model they talk about probabilities, log normal distribution, and how prices cluster round the mean. I have also heard about the principle of "regression toward the mean". And I read Macmillan probably 10 years ago and remember him talking about "ratio writing" which gives the same profit profile as a straddle.

I read a book recently that talked about trading bands but he did not use them in this manner. The book is called "Aggressive Investing .. Proven strategies for Bold Investors". (Richard Croft). A worthwhile book, but too timid for me ! I am sure the author would never dream of recommending straddles. On the Canadian Options thread there is an options professional who makes some excellent posts. This morning he too said "No way!". (q.v.)

(Maybe I am unfair to Richard Croft. Maybe there is more of his book here than I realise).
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