Learn about Straddle and Strangle option strategies, their advantages, disadvantages, and ideal market conditions for profitable trading.
This course dives into Straddles and Strangles, which are cool trading strategies that let you profit no matter which way the market moves. Learn how to manage risks, understand the environment for these trades, and figure out when to use each strategy to your advantage.
Straddles and Strangles are non-directional strategies that can profit from big moves in any direction
STRADDLE & STRANGLE OPTION STRATEGIES
Straddles and Strangles are also Volatility strategies and are very popular strategies. Both these strategies are non-directional, so its possible to profit from a movement in either direction. But the move must come fairly quickly, because we have two Long Options (one on the Call side and one on the Put side), and so our time decay exposure is doubled. Additionally, Vega exposure can be quite large, so this is something to watch for. In general, its best to put on Straddles and Strangles in times of low volatility as measured by the individual Implied Volatility of the stock itself as well as observing the level of the VIX Index. We also look at the "Valley of Death" where the trade can fall into trouble.
Straddles and Strangles fall into two categories of Strategies - 1) Non-directional strategies and 2) Volatility strategies.
 In non-directional strategies, you don’t care if the Stock goes up or down. Your strategy profits from a move in either direction. The strategy starts out Delta Neutral – or at least you should try to construct it that way. But this does not mean your position will remain Delta neutral forever. In fact, your position will achieve a +ve Delta or a -ve Delta bias, depending on the stock’s movement. But these strategies have one clear advantage over others. You don’t have to be right in forecasting the direction of stock movement, and that fact alone put Straddle & Strangle strategies in our Favorites.
What you will master
Why are Straddles and Strangles very popular
The pluses and minuses of these strategies
Why these strategies can be deceiving for newcomers to these strategies
What is a good environment for these trades
What is the difference between a Straddle and Strangle
Is one better than the other in certain situations
What are the advantages and disadvantages of these trades
Why is Vega exposure critical
What is the "Valley of death" and how can we avoid it
Detailed analysis of the Straddle setup using Priceline and SPY ETF
Actual trade execution of the SPY Straddle
Trade Management of the SPY Straddle
Adjustments to the SPY Straddle
Learnings from the Straddle trade
Tackling the negatives of the Straddle
Understand the Straddle and Strangle trades
Why these strategies are categorized as Non-directional and Volatility strategies
Clearly understand the negatives of a Straddle
2 Lectures
Knowledge. Strategy. Execution.   Hari Swaminathan is the founder of OptionTiger, a cutting-edge Options mentoring company, and a full-circle educator in all areas of Financial Markets, Hari has developed several proprietary Intellectual Property "methods and approaches" around enhancing base case Options strategies (which favor the Market Makers) and turns that deficit into a massive EDGE on the trader's side.Hari has a...
Very knowledgeable
Excellent course and very informed instructor who is able to hold my attention very well.
meh, its very basic understanding of what 'is' a straddle/strangle, but does not help beyond a basic understanding of how to implement one and when not to.
Very beginner level understanding.
I was expecting to see Short and Long strategies as part of this course, with trade management. So I only got half of what I wanted....
Teaches us about straddles and strangles, what to be careful of, as well as how to mitigate some of the risks. Overall, a good, short course to learn from.
I love Option Trading. This session revised my again about Straddles and Strangles. Thank you.
very well explained
S far I took a few courses taught by Mr Swaminathan and I enjoyed each one tremendously. He describes strategies in detail, and is using examples which as a beginner, I can understand.
A good options trading course. But remember that here are presented advanced topics. Before taking this course I recommend making a serious research about options trading in order to understand what is the author trying to say.
Your email address will not be published. Required fields are marked *
Maarten V.
Very clear explanation and comprehensible for a beginner in options. Thank you.