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?
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.