An Each Ways Bet…

When trading options, it is possible to use a "straddle", buying a call and a put option in the hope that you will get a big winner in one direction or the other. The strategy wins when the win is big enough to cover the premium paid to buy the options. You use a straddle when you think the market is likely to break out sharply in one direction or the other, but you are not sure which way it will go.

 

You can’t employ a straddle with a direct instrument like futures. However, we can create a strategy to deliberately trade in both directions…

 

Click here to see the full article with illustrative charts and video.

 

 

 

 

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