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Old Jun 13th, 2011, 12:14 PM   #1
falconview
 
 
Join Date: Jun 2010
Posts: 1,465
Having failed at credit spread trading, Gap trading and straight buying of options. I´m now trying LONG STRADDLES in options. Got one week in it now, but probably run through the month. Any body got any advice on making money with lONG STRADDLES?
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Old Jun 13th, 2011, 01:24 PM   #2
etemtezcan
 
 
Join Date: Nov 2008
Posts: 76
buy low, sell high
implied volatility can be thought as the price of straddle, dont buy when it is too high, dont unload your straddle when IV is too low.

Long straddles will suffer from theta decay (straddle value will erode everyday without significant UL movement. ).

when you got lucky and UL moves somewhere and you got in profit, don't let your profit decay. lock some profit by a technique called gamma scalping

good luck
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Old Jun 13th, 2011, 01:44 PM   #3
rmorse
 
 
Join Date: Apr 2011
Location: New York, NY USA
Posts: 1,056
Quote:
Quote from falconview:

Having failed at credit spread trading, Gap trading and straight buying of options. I´m now trying LONG STRADDLES in options. Got one week in it now, but probably run through the month. Any body got any advice on making money with lONG STRADDLES?
Rather than randomly selling or buying straddles, I look for opportunities on both sides. For buying there should not only be a catalyst, but also pricing that does not take that into account. For selling opportunities, look for vol. pricing higher than actual current vol, with little or no up coming catalyst. I like to do both.

In general, I find traders that only look for selling opportunities do better over time.

Just my opinion....
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Old Jun 13th, 2011, 02:34 PM   #4
AAAintheBeltway
 
 
Join Date: Oct 2001
Posts: 15,883
Quote:
Quote from falconview:

Having failed at credit spread trading, Gap trading and straight buying of options. I´m now trying LONG STRADDLES in options. Got one week in it now, but probably run through the month. Any body got any advice on making money with lONG STRADDLES?
Why not just stick to trading the underlying? If you couldn't make money trading credit spreads, why would you expect to do better trading something riskier?
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Old Jun 13th, 2011, 03:25 PM   #5
falconview
 
 
Join Date: Jun 2010
Posts: 1,465
Last year I traded credit spreads for about 8 months. Got wiped out twice. It was paper momey.
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Old Jun 13th, 2011, 03:37 PM   #6
falconview
 
 
Join Date: Jun 2010
Posts: 1,465
About 25 years ago, I made note of a strategy, trading Long Option Straddles. Since I am currently out of idea, I was re reading my notes. Somebody back long ago had what they said was a long option straddle method that worked.
So I am trying it in paper money. 25 years ago they did not have the internet resources, charting and paper money trading they have today. Just got one week at it, too soon to tell anything, but will see by the end of the month. In the meantime, I have heard sporadically of people making, or losing oodles of money trading long option straddles. So just wondered if there was any body out there successful at it?
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