Silicon Investor (SI) -- The First Internet Community

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 : Swing Trading With Options -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (28)	8/2/2001 2:41:18 AM
From: tuck	Read Replies (1) \| Respond to of 88

Dan, One follow-up technique mentioned by McMillan wrt straddles is to roll up the side that first goes against you. That is, if the stock goes up, one rolls up the put, if it goes down you roll down the call. This makes it a strangle and reduces risk while preserving the profit potential in both directions. I mostly do covered writing and put selling, but I also short through naked calls sometimes. I lost a lot more sleep selling naked calls against NVDA than on the AVIR straddle, but I eventually made some out of it (had to roll forward three times). And actually made a quarter point per AVIR straddle after transaction costs. A friend has observed that many stocks do a slow burn after crashing in the way AVIR did, and his observation was right on with AVIR. Should have stuck with it for a few more days. McMillan also warns about chickening out for small profits. From a strategic perspective (i.e. selling 'em often) straddles apparently are supposed to be allowed to run, resulting in lots of small losses offset by the fewer big wins. Few folks have the emotional make-up for them, and I remember now that I'm one of those that doesn't have it. Cheers, Tuck Cheers, Tuck