Tips, Tricks & Nuances Of Making Strategies Work And When And How?

Discussion in 'Strategy Building' started by falconview, Jun 25, 2012.

  1. Somebody was talking to me about A.J. Brown having a webinair on straddle trading.

    I was looking up his last comments on the web, dated about a year and a half ago. Think I'll skip his webinair.

    He had a strong sales pitch about trading a long option, and if you made it during the day, you won. If by closing time you did not make your profit goal, he said to put a debit spread on the other side, forming a straddle, with a long on one side and a debit spread the other side. In later reading, I got the part this trade was for earnings announcements or something?

    I tried it in several TIMING versions but could not make it work, only got losses. So discarded it. Then this notice of a webinair made me look him up again. I was recalculating the strategy, more for ordinary trading with a TIMING SYSTEM. If you put on the debit spread, it can only show a profit of .30 cents at maximum. In the same contrary market movement, with the Long option, you would lose about a $1. So the losing would be net .70 cents, more or less counting commissions. He talks about an earnings report bet. But a big earnings report stock would, once it moved on the opening be unlikely to come back and make that losing long option bet successful. So still think his trade is a loser. I'm not sure if you had bet a long position OTM one strike, if that would make the difference? The debit spread is always OTM one strike. Too discouraged with the idea to follow up on it.

    COMMENTS?
     
    #31     Aug 21, 2012
  2. ronblack

    ronblack

    The options market is and was always rigged.
     
    #32     Aug 22, 2012
  3. Ha! Ha! Your right of course.

    Tried a new way to trade this morning and yesterday and it earned $300 in TOS paper money. I'll try it another time or two, before trying in cash.
     
    #33     Aug 22, 2012