Hi John,How about using the strategy of LONG STRADDLE for shares like AONE? Since we can not make sure the direction of price will move before earning report announced. So, if using non-direction strategy like LONG STRADDLE will be better than strategies with direction? Since we will own higher winning probability. How do you think? Thanks. Jay
版主回覆：(01/26/2012 05:45:42 PM)
yes and no~ because you have to consider stock price to move "enough" to start profiting, for example AONE we buy in $10 Calls and Puts at the same time, it will cost us over $1.20, meaning stock price have to move to either $11.20 or drop below $8.80 to start making money, which is 12% move either side, if it doesn't, then we just lost $1200 combine for same 10 contracts. Straddle are good when stock price have a breakout after earning, but again this is more gambling. I done straddle strategy for a while before, the winning percentage is not as rosy as it look. Of course, I known others that do straddle or strangle well, maybe this is your trade and you can master it better
Hi John,How about using the strategy of LONG STRADDLE for shares like AONE? Since we can not make sure the direction of price will move before earning report announced.
回覆刪除So, if using non-direction strategy like LONG STRADDLE will be better than strategies with direction? Since we will own higher winning probability.
How do you think?
Thanks. Jay
版主回覆：(01/26/2012 05:45:42 PM)
yes and no~ because you have to consider stock price to move "enough" to start profiting, for example AONE we buy in $10 Calls and Puts at the same time, it will cost us over $1.20, meaning stock price have to move to either $11.20 or drop below $8.80 to start making money, which is 12% move either side, if it doesn't, then we just lost $1200 combine for same 10 contracts. Straddle are good when stock price have a breakout after earning, but again this is more gambling. I done straddle strategy for a while before, the winning percentage is not as rosy as it look. Of course, I known others that do straddle or strangle well, maybe this is your trade and you can master it better