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Technology Stocks : Network Appliance
NTAP 112.28+0.6%Dec 1 3:59 PM EST
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To: SecularBull who wrote (7473)4/3/2001 10:47:19 PM
From: kas1  Read Replies (1) of 10934
 
And my argument is that a straddle is a bad choice here, for two reasons:

1. A straddle is good when the stock is volatile in both directions. NTAP has been volatile only in the down direction.

2. The volatility index (^VIX) is very high right now. ^VIX is used to compute the volatility premium on options. Options are very expensive now, so expensive that it takes a very big move to get you into the black on a straddle.
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