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Strategies & Market Trends : The ultimate play:STRADDLES on earnings announcements.
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To: Chris Baker who wrote (52)7/30/1996 10:22:00 PM
From: Avi Halpern   of 140
 
Chris
Terminology: straddle is when you buy call and puts for the same strike price, and spread is for different prices.

For "longer" term (more than one week) I like to use spreads. For example: two weeks ago when Seagate (SEG) where at 42 I bought the 45CALL and 40PUT and it worked well, however it didn't work so good with KO, they were stuck in the 46-48 range too long.

For the expiration week a straddle works better only in the last day or two (except if the market moves alot or you if have perfect timing).
I still like to concetrate on companies that release earnings in that last week. There is a better chance of strong movement.

Maybe this friday will qualifies for volitility with all the economical #'s coming out.

Good luck.

Avi
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