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To: SecularBull who wrote (7473)4/3/2001 10:47:19 PM
From: kas1  Read Replies (1) | Respond to of 10934
 
And my argument is that a straddle is a bad choice here, for two reasons:

1. A straddle is good when the stock is volatile in both directions. NTAP has been volatile only in the down direction.

2. The volatility index (^VIX) is very high right now. ^VIX is used to compute the volatility premium on options. Options are very expensive now, so expensive that it takes a very big move to get you into the black on a straddle.



To: SecularBull who wrote (7473)4/4/2001 4:59:41 AM
From: kas1  Read Replies (1) | Respond to of 10934
 
a straddle can work well for volatile stocks (preferably using options).

BTW, how would one do a straddle not using options? :-)


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