Tech Stock Options Message Board

STOCKTALK

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 : Tech Stock Options

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: donald sew who wrote (33993)	1/24/1998 11:43:00 AM
From: Patrick Slevin	Read Replies (1) of 58727

VOL and Strangles/Straddles I have always been more prone to using times of high volatility to legging into butterfly credit spreads. (Unless of course I anticipated a trend one way or the other was developing, and you do not feel that this is the case for a short time). Anyway, in the case of high premiums due to volatility I would have to research it but I would think that one would be better off on a short strangle than a long one, if the prognosis was for the market to be flat, as you say, over a couple of days. If you are short a strangle and the market goes nowhere you win by virtue of time decay. In any event, legging into a butterfly does the same thing for me. With the market on the low end of the anticipated range I would be buying a call at 3 sigma, for example, and writing a put at 2 sigma. When the market hit the high end of the range I would complete the butterfly by writing the call at 2 sigma and buying the put at 3 sigma. But I should know this stuff better anyway. I'll research it when I get a chance later. (Perhaps during the endless break between Super Bowl halves.)

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next