Registered: Jun 2010
06-18-11 09:18 AM
Nice on your success. Jacksjjtet4
The more I am studying the long straddle, the more complicated and varied it can get. I´ve opened Pandoras Box for me as a novice. Got some very nice and kind helpers on here though helping me along.
So far the best play on the LONG STRADDLE seems to be the VOLATILITY PLAY. Short and sweet.
Another benefit, I´m finally after years, studying the effects of GREEKS, at least on the Long Straddle. Might even get it down and understand the relationships and how to use them practically given a few more weeks. I was always obstinate and wanted graphical indicators to tell me the same thing basically, rather than take the time to learn the relationships of the GREEKS.
There are some LONG STRADDLE twists, some of which many people do not know.
There is the Long Straddle volatility play, but also the DARVIS BOX Long Straddle play, the Overlapping Long Straddle trend following play in 2 options, 4 options and 6 options. Though I fear I could not keep them straight when it gets too many options. The earnings reports is the standard Long Straddle play, then I was introduced this week to the Expiration Weekly option play. ( got to do some more study on that one, as I used to trade weekly credit spreads and like Weekly options ) The variations seem endless?
Its going to take me a bit of time, to absorb and reject some of these by trying them in real time. Had no idea the Long Straddle was so popular. Anyway, I´m in the early morning hours making notes of the GREEKS and what they do, trying to build an automatic reflex picture in my minds eye, so I can use them instinctively. Going to be at least 2 more weeks, before I get them down pat, at least for the Long Straddle. Once I graduate, I will go from Options 101 novice, to Options 102 trainee level.
I´m looking forward to the time, I can graduate with my Masters Degree in the LONG STRADDLE. I will have earned that, hopefully by Xmas this year, if I can make back, the - $2800 I lost of my $10,000 stake a couple of weeks back, by switching from paper money trading, to cash real money trading the GAP trade and found the difference was that the sharks, market makers were waiting for me to stupidly use the MARKET ORDER, which I did in the narrow SPY spread. I never in my life dreamed I could get ripped off so fast. The trade was bid $7.00 and I pre- expected the GAP correctly and figured a market order FILL of $10.00 to $10.50. Usually the spread is 1 cent to 3 cents. What I got was atrocious, a license to steal. I got filled at $14.50, my market order was the highest price for several days in premiums. I was shocked to say the least, to go into a $7 bid and get FILLED at $14.50.. Lesson learned, only use LIMIT ORDERS. Can´t even go back to my GAP trading, as I cannot risk the money anymore on that. Smaller bets would not return enough to make back the money. Hence exploring and learning the LONG STRADDLE, so I can make small bets with the remaining of my RISK CAPITAL in real money.
I´m back to virtual trading again the LONG STRADDLE while I learn it. Lots of experienced GOOD FOLKS on here though, helping me. It is a wonderful experience, compared to some of the other forums I have been on.