analyse a straddle

B

buybig

May be dumb on my part but i learn by doing.

opened a straddle today on QQQQ.

52 strike qqqxz *2
52 strike qqqlz *2

the options were ATM when purchased

iv and hv were close.

hoping for a move tomorrow.

so what do you guys think?

attached are the greeks from the time i traded.

also a bunch of charts i cant read from scwhab.

:)
 

Attachments

Your first two graphics are illegible. I'll assume you're "long" the straddle because rookies usually start out that way. As for an exit strategy, if the market has made a "strong" move before the Fed's announcement by 1pm (Central Time), you should offset the profitable leg of the straddle and then hope for a big reversal after the news is out when you can offset the remaining leg. This will allow you to sidestep most of the volatility decay that will occur adversely affecting your position. It might just unfold that way. Good luck.
 
Quote from nazzdack:

I'll assume you're "long" the straddle because rookies usually start out that way.
More...

With strikes every 1 dollar, ATM options in the $1.00 range and the bid/ask spread in the pennies there is nothing " rookie" about buying QQQQ options. I don't think it's been a cake walk for the sellers.

qqqq.jpg

QQQQ 1 year chart
 
I'll assume you're a rookie too because you seem to love buying cheapy-calls with a few days remaining until expiration. I'll bet you can hardly wait for next week! I'll also assume you're a rookie because you didn't answer the original poster's question.
 
?.......strong move before the news........offset the long-call.......wait for the reversal.......offset the long-put later.......avoid the volatility decay......it might unfold that way. I'm exactly like you, a rookie who has never traded and is studying for arithmetic final exams. Enjoy your Christmas vacation, friend!
 
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