Great point. Absolutely no risk involved. http://www.elitetrader.com/vb/showthread.php?s=&postid=1776559&highlight=Mark+Cook#post1776559
Here are the books I have. Options are confusing. So many "if / then" , "if/ else" possibilities. I'll probably just end up just buying plain old options as a directional play like I do with stocks. It's easy to understand 1. are you: Bullish? buy calls. Bearish? buy puts 2. How long do you think it will take price to reach x price? 3. Buy options with the time desired. 4. Good luck ....and it will be cheaper than buying the underlying stock.
For anyone that has traded market neutral strategies will have to agree with this post as 100% accurate. I have made countless adjustments to my Iron Condors to stay in the game over this entire move higher. Trading options is rewarding but it is certainly very hard work.
ask yourself 2 question: 1) What will the p&l of your position looks like when WINN stock moves either up or down 2) What will you do when WINN stock moves either up or down. If you dont know the answer to those 2 questions, exit the position immediately. Short straddle can quickly become a big loser if the underlying start to move, they are only market neutral if the market doesnt move.....
....i think the bottom line here is you should not be looking at market neutral strats in a melt-up, ben put covered bull market....
....it is market neutral, but you can tell from the replies that not every one agrees what that means or how to use it...