Stocks & Commodities V. 26:3 (24-32) Buying Straddles by Jay Kaeppel

Stocks & Commodities V. 26:3 (24-32) Buying Straddles by Jay Kaeppel
Item# \V26\C03\044KAPP.PDF
Availability: In Stock

Product Description

Buying Straddles by Jay Kaeppel

In this, the third article of the series, the strategy of buying a straddle is discussed, which gives option traders an opportunity not available to others.

AS discussed in the first article in this series, there are several key factors to consider in determining the best option trading strategy to use at any given point for a given security. Likewise, these criteria can be used to zero in on the specific best option or options to trade in executing a particular strategy. Selecting the proper strategy involves knowing what to look for in terms of the following variables:

■ Probability

■ Volatility

■ Time left until option expiration

■ The “skew” of implied volatility across strike prices and/or expiration months

■ Timing of market price movement.

The PROVEST option trading method criteria were developed to identify specific criteria in each of these key areas. The primary factors and key considerations are summarized in Figure 1.

In this installment we will look at a specific trading strategy — buying a long straddle — and how to use the PROVEST criteria to identify trading opportunities.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at users can view the S&C Digital Edition in the subscriber's section on

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order