Re: buying options straddles
[ QUOTE ]
so between time decay and impied volatility being added to the price it makes it difficult to make a lot of money? . . .
unless there happens to be a huge jump,
[/ QUOTE ]
Difficult yes, hardly possible, no. Personally I take a chance on estimating the next direction the stock will move and buy accordingly. If I am wrong tuff luck but the times I am correct I have eliminated both the time value decay and volatility premiums. I make much more profit the times I am correct than I lose the times I am wrong. My best results naturally come in the last week before expiration and in volatile times like this week, the conditions have been perfect.
Jimbo
|