A "Straddle"

[Teach]

There's an option approach that involves buying "calls" and "puts" on the same stock. I have never used it, but I have been tempted, especially when I was younger and more of a risk-taker.

I believe there is a time and a place for a "straddle" play. One such play may be coming up tomorrow, Wednesday, January 30 afternoon.

FOMC Chief, Jerome Powell, is scheduled to speak at 2 p.m., Wednesday, after a two-day Fed meeting, as to his take on the state of the U.S. economy.

Per usual: investors, economists and media-types will be hanging on his every word. Even his inflections. They'll be looking for some clue as to what the Fed may currently do, or more particularly, what they'll do going forward.

Oftentimes, this is a non-event. Nothing is said that wasn't anticipated. Yet, sometimes... Occasionally. A new slant comes forward. That approach impacts the market. Some sectors more than others.

Finally, this was the time I'd think about "straddles".

It's sorta like the lyrics of that "Lovin Spoonful" song: "Take up with one and leave the other behind."

[king kong]

I straddled my options over the Oriental playing black jack with monkey p. booby chico,carly mitch.Took a streetcar from tappan st. to c.corner ,hopped a bus to Dudley,another bus to blu@morton what memories.G&G cornbeef anyone

[barn32]

Originally Posted by Teach

One such play may be coming up tomorrow, Wednesday, January 30 afternoon.

FOMC Chief, Jerome Powell, is scheduled to speak at 2 p.m., Wednesday, after a two-day Fed meeting, as to his take on the state of the U.S. economy.

Per usual: investors, economists and media-types will be hanging on his every word. Even his inflections. They'll be looking for some clue as to what the Fed may currently do, or more particularly, what they'll do going forward.

Finally, this was the time I'd think about "straddles".

The options on this kind of play will have such a high priced in volatility that straddles such as these will rarely make money. Not impossible, but highly unlikely.

There are better strategies, such as selling the volatility (and there are many different ways to do this, spreads, condors, naked, etc.) and profiting when the volatility "comes in." Just keep in mind you'll have to pretty accurate about direction.

However, if you do put on a straddle with high volatility you can be right about the movement but you lose out when volatility comes in. In other words, once the event is over the shrinking volatility eradicates all of your profit (assuming you had any) and throws off a loss. The option sellers got you.

Others have thought about these plays over the years and if they were working they'd be bragging about them incessantly.

Straddles are expensive and they just don't work.

[Buckeye]

The Market went up over 400 points today.

Mostly I suspect because the dope Powell decided to back off.

[reckless]

Originally Posted by Buckeye

The Market went up over 400 points today.

Mostly I suspect because the dope Powell decided to back off.

Why do you think Powell is a dope? Any reasons you have because we'd like to know. Thanks.

[Buckeye]

Most of all, he's not the Federal Reserve Chairman, Trump is.

He's weak and he'll do whatever Trump tells him to do.

Not the first time this has happened.

[reckless]

Originally Posted by Buckeye

Most of all, he's not the Federal Reserve Chairman, Trump is.

He's weak and he'll do whatever Trump tells him to do.

Not the first time this has happened.

Well Powell was wrong in raising rates in the first place, and he made it even worse by signalling he would raise rates 3-4 times again in 2019.

Yes, Trump muscled him then and Trump was right to do so. There was/is no real proof for the need to raise rates in 2019. I am sure Powell will raise rates once or twice just so people such as yourself stop calling him weak and this is 'Trump's' Fed. There will come a time when Powell will try to prove that the Fed is independent.

There are too many people throughout the Fed umbrella that also had this stupid notion that job growth and lower unemployment is inflationary and bad for the country. They use that as their reason to raise rates. This is idiocy in the highest order.

The other problem also is too many in the Fed have much too easy access to Bloomberg, Fox and CNBC -- and their nonsense is never questioned. Why? Well, all of these cable outlets really want the economy to tank and the stock market to crater for no real reason except Trump is now the President.