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Strategies & Market Trends : NEUTRAL TRADING STRATEGIES

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To: Lance Vainik who wrote ()10/23/1996 1:56:00 PM
From: Size-ola Berry   of 18
 
There are 2 basic strategies...

Backspread....Want the stock to move, want volatility to pop.
You have daily decay. :( If the stock doesn't move you lose.
ie. buying stradles, buying strangles, buying synthetics....etc...

Frontspread...Don't want the stock to move, want volatility to crush. You collect decay, but have huge risk to the up/downside.

good strategy....sell the fattest straddle and buy the cheapest strangles.

have fun
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