Strangles & Straddles

Discussion in 'Trading' started by RainMaker3000, Jul 10, 2002.

  1. RainMaker3000

    RainMaker3000 Guest

    let's talk about trades that make short term Strangle & Straddle plays


    :D
     
  2. RainMaker3000

    RainMaker3000 Guest

    straddle GE @25 & @30

    entry price - Put @25 = $60
    Call @30 = $25
    Cataylst = earning call , Friday before the open
     
  3. rs7

    rs7

    Don't have option quotes right now...what expirations? Also am I reading these prices wrong? How can a 25 put be worth $60? Wouldn't the stock have to go to Negative 35 to be in the money? What am I missing? Also, do you expect an $85 move on earnings? I am sorry for sounding dumb. I know I have to be misinterpreting what I am seeing here.
     
  4. RainMaker3000

    RainMaker3000 Guest

    July , expire next week, we'll see if GE moves after the earning call

    THe calls are trading @$30 and the puts @$55 right now
     
  5. rs7

    rs7

    I guess I am misreading the whole thing...what strike prices are you talking about....maybe I got your prices mixed up with strike prices...only thing I can think of.
     
  6. RainMaker3000

    RainMaker3000 Guest

    The trick is your put and calls act like a hedge, therefore if its a bad call you go short on the stock and you're covered by the calls, and if its a good call , you go long and are covered by the puts, it a double plus, plus if something happens after the call your hedged
     
  7. rs7

    rs7

    Uhhhhh... ok...but what are the strike prices? And isn't the stock at 27? What am I missing?
     
  8. RainMaker3000

    RainMaker3000 Guest

    earning before the open, if its good it'll rally over $30, if not i see it breaking down below $25
     
  9. rs7

    rs7

    OK..one last time..
    tell me the STRIKE prices of the calls and the puts and the cost of the options so I can understand....please???
     
  10. RainMaker3000

    RainMaker3000 Guest

    Strike CALL = 30
    PUT = 25

    Price call = $25
    Put = $60

    expire July 20
     
    #10     Jul 11, 2002