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Alex - My Trader's Journal's picture

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  • Alex - My Trader's Journal

Alex - My Trader's Journal

1 year ago

in New Weapon to Arsenal on Investing Adventures
The straddle is good to use at the right time, but a strangle can be too. That's where you sell both sides. If it flattens you have a profit from both, but if it edges in either direction you only have a profit from one. If it takes off in either direction you face large losses.
I think it's worth checking the implied volatility of any option before picking a direction. Too high vol can lead to a quick drop in premium and vice versa.
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