Posted on March 24th, 2010 
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A bought strangle is made up of a bought call option and a bought put option. Combine these two trades together and if there is a different exercise price you have a strangle. A bought strangle pay-off is demonstrated below.
Bought Call |
Bought Put |
Bought Strangle
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To receive ASX Option Recommendations or to learn more about straddles and strangles please request the complete Straddles and Strangles eBook by contacting us on 1300 368 316 or info@totaloptions.com.au
ASX Option, ASX Option Recommendation, Bought Call Option, Bought Strangle, Call Option, Option, Option Recommendation, options, Put Option, Straddles, Strangle |
Posted on March 22nd, 2010 admin No Comments
The e-book will have detailed information about the bought strangle strategy. This is because this is the most common strategy and the strategy that I find most profitable. The bought straddle is very similar and references to the strategy will be made throughout the e-book. The sold straddle and strangle are great strategies but have much higher risks, therefore is you would like more information please contact me directly.
To receive ASX Option Recommendations or to learn more about straddles and strangles please request the complete Straddles and Strangles eBook by contacting us on 1300 368 316 or info@totaloptions.com.au
ASX Option, ASX Option Recommendation, Bought Strangles, Option, Option Recommendation, options, Sold Straddle, Straddles, Strangle, Strangles |
Posted on March 22nd, 2010 admin No Comments
If you are a straddle seller you have a greater maximum reward (credit for selling the options) but also a larger risk of losing all the reward and more if the stock moves too far from the strike price. If you are a strangle seller, you have a lower maximum reward (less time premium sold) but also a lower risk that the stock will move outside of the strangle strike window to lower the reward or even go to a deficit. The sold strangle has a lower potential profit than the sold straddle, however it offers greater protection since the share price must move further to result in a loss.
To receive ASX Option Recommendations or to learn more about straddles and strangles please request the complete Straddles and Strangles eBook by contacting us on 1300 368 316 or info@totaloptions.com.au
ASX Option, ASX Option Recommendation, Option, Option Recommendation, options, Sold Straddle, Sold Strangle, Straddles, Strangles |
Posted on March 22nd, 2010 admin No Comments
The sold strangle is the converse of the long strangle. The call and put options are sold instead of bought. The investor loses if the underlying security increases or decreases enough; but if the stock price remains stable then the options expire and the investor gets to keep the premiums.
To receive ASX Option Recommendations or to learn more about straddles and strangles please request the complete Straddles and Strangles eBook by contacting us on 1300 368 316 or info@totaloptions.com.au
ASX Option, ASX Option Recommendation, Long Strangle, Option, Option Recommendation, options, Put Option, Put Options, Sold Strangle, Straddles, Strangle |
Posted on March 20th, 2010 admin No Comments
The biggest differences between a straddle and a strangle are the cost of the positions and how far the stock needs to move to produce a profit. Because a straddle is at-the-money both the put option and the call option will be much more expensive than the call and the put in a strangle. If you play either a strangle or a straddle around earnings, you will find that among volatile stocks, the strangle will have to move quite a bit more than the straddle to make the position profitable.
To receive ASX Option Recommendations or to learn more about straddles and strangles please request the complete Straddles and Strangles eBook by contacting us on 1300 368 316 or info@totaloptions.com.au
ASX Option, ASX Option Recommendation, ASX Options, Bought Straddles, Bought Strangles, Call Option, Option, Option Recommendation, options, Put Option, Straddles, Strangles, Volatile |
Posted on March 19th, 2010 admin No Comments
This Straddles and Strangles eBook is and introduction into trading strangles and straddles. These are non-directional trades that take advantage of large share price movements. The information will teach what market environment a bought straddles and strangles are suited for.
To receive ASX Option Recommendations or to learn more about straddles and strangles please request the complete Straddles and Strangles eBook by contacting us on 1300 368 316 or info@totaloptions.com.au
ASX Option, Non-Directional, Option, Option Recommendations, options, Recommendations, Straddles, Strangles |
