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To: edward_k who wrote (7960)	3/17/2000 10:06:00 AM
From: Voltaire	Respond to of 35685

Hi Edward, Just as the post says , it is difficult to adjudicate what the trader is trying to accomplish but in most cases they are playing off the volatility and one would purchase a straddle on a stock like Qcom that has the potential to move far enough to show a profit in a certain time frame. I would imagine this was done because the option prices have been relatively low and therefore the purchase is cheaper. Just don't want to put too much money in a straddle because you can lose it real quick. One is basically trying to make money let's say on the call because he feels it will be a certain percent higher at a certain date and feels the chances are better for that move than one down and can then try and calculate the move of the options. Can be a lot more involved than that but that is the general theory. V