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Strategies & Market Trends : Advanced Option Strategies -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (263)	1/25/2000 10:42:00 PM
From: OX	Read Replies (1) \| Respond to of 355

buy stock, write straddle... hi Dave, I recall Bittman covers this in his 'conservative' book on options for stock investors. (shhhh... don't tell taxman this is a conservative strategy :-) I can't comment specifically on the characteristics of the stocks in the newsletter, but I would think this strategy is best for good stocks in a trading range to generate extra income. As a reformed CC-er and current NP writer, I approve of this strategy when done conservatively (meaning not overleveraging) on sound underlying. Kind of a NP trade on steroids. wmchen was advocating a similar (yet more aggressive) straddle write on the 'selling puts' thread, but I only paid partial attention to it since I would rather keep my trades simple (meaning not too many legs). --- is this 'volatility newsletter' the one from macmillan's that you mentioned on your 'spreads' thread earlier? tx

To: jjs_ynot who wrote (263)	1/25/2000 11:11:00 PM
From: OX	Respond to of 355

I ran across this just now... #reply-12679347 also see the post it is a reply to.

To: jjs_ynot who wrote (263)	1/26/2000 12:19:00 AM
From: tyc:>	Read Replies (2) \| Respond to of 355

If I may make an observation.... I have just glanced at the straddle recommendation and note that it involves the purchase of common stock. IMHO This is fine when the call side is in the money; but if the stock price drops and the puts get to be in-the-money, the whole position will get very "bullish ( i.e. vulnerable on the downside). It is this latter situation that I have become familiar with. When the puts are In-the-money the downside risk should be hedged with short stock, not long. Of course if you are only talking about a single put and a single call, perhaps downside vulnerability might not be important. But it probably would worry me !