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......
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.