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 : Advanced Option Strategies
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: tyc:> who wrote (318)3/27/2000 11:06:00 AM
From: David Lind  Read Replies (2) of 355
 
You don't hear often about strategy failures on these threads, but last month I reported on a few positions I opened as short strangles on high volatility stocks, with the call and put spread way OTM. The logic was to spread the options beyond 2 standard deviations on BB charts, and let price range between the strikes. However, it was necessary for me to exit the short call legs at a loss during the trade, putting the positions at an overall slight loss. The lesson here, as many of you have already learned, is to be extremely cautious in any strategy that includes an uncovered call. An unexpected rally can dramatically increase the short call option price, not only because of the rise in the underlying, but also due to an increase in the volatility component.

For those who had noted my postings on the short strangles, I wanted to let you know that this is a strategy that hasn't paid off for me. Had I simply put half the energy, time and margin into selling OTM puts, the results would have been more profitable.

-David
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