The ultimate play:STRADDLES on earnings announcements. Message Board

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Strategies & Market Trends : The ultimate play:STRADDLES on earnings announcements.

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To: Robert Sherman who wrote (83)	5/30/1997 10:28:00 PM
From: Richard J. Byrd	of 140

Jay&Bob: Sorry, I havn't been logged in for several days and didn't get your messages. I've done my straddles only on OEX options. I play some equity options, but I prefer the index options. Although I have profited from most all straddles I have played, they do drive you crazy with the choice of exits. If the market takes a strong move up or down, you have to try and figure whether this is a long-term trend, or just one cycle in a cyclic market. It makes a big difference as to whether you cut loose the losing leg of the trade. I have found the agony factor to be more difficult in straddles than in a straight one-way trade, but they can get you a nice profit, many times on both ends of the straddle. The most sure strategy I have encountered is the dead-cat-bounce (up or down). This strategy is to play a straddle after a rapid, large move in the market (or equity). These moves put the market at an unstable point; perfect for a straddle. Dick

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