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(Rep: 1610) reply to JEKYL2000

Date: 04/06/2011 11:59

Forum: Got Options - Msg #11704 - List AMSC msgs

Thread #673201491 (Rec: 0)

wow this stock did take it the hard way... the straddles that u mentioned lots of times work wonders during earning season.... the only thing is you have to play a volatile stock.... another time they work awesome is fda appproval on a drug ......they are a great way to trade J......

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Reply to JEKYL2000 - Msg #11702 - 04/06/2011 11:49

Do or Die

I was looking at AMSC that they were ooohing and aaahing in the PIT from a large drop. I recorded the calls and puts from before the close since it happened after hours. This morning I looked at the same strikes and was wondering how often we could come up with the same type of scenerio.

If we had put $1,000 in the $25 puts and $1,000 in the $25 calls, our calls would have gone from $1.85 -> $0.05, and our puts would have gone from $1.60 -> $11.50. The $10,000 gain from the puts would well cover the -$1,000 loss in the calls.

I was wondering if this is a popular strategy. Finding a situation that might make or break a deal in a company and profiting off the greatest direction either way.

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