Will keep you informed if I place the trade.
Any comments or thoughts?
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I have a look at SHLD again. It is a high probability straddle trade.
ReplyDeleteThe earnings move is great. Look at URL : http://www.optionslam.com/earnings/stock.html?symbol=shld&x=0&y=0
Besides with the horizontal V on my chart points to a breakout - up or down soon. Price has been compressing. The IV is low. And, in Nov earnings is going to be around the same time as option expiration. Talk about a better time for volatility!
My deduction for straddle is that it does not need to end beyond the upper and lower BE points to make money. You can make money from the volatility moves with some price movements. Am I right? I welcome any comments.
In my back test exercise, the straddle at 6-8 weeks makes more money than 8-10 weeks. But your risk is higher for 6-8 weeks as the time decay is against you. Also, 8-10 gives you a little more time for the trade to work.
I will add more comments as new insights occur on trading straddle
The only thing we need to confirm is the earning date. I checked three sources, and they all say, "earnings date" unconfirmed.
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