Buying Calls and Puts of the same underlying and maturity
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Of course not. It's called a "straddle."
With options, you have...options.
You can basically create your own strategy as you see fit.
You decide your own risk/reward levels.
You can basically create your own strategy as you see fit.
You decide your own risk/reward levels.
very true, silly me, sorry I forgot that.And, what about going Long and Short at the same time with the same a) options, b) stocks ?
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no,
And, what about going Long and Short at the same time with the same a) options, b) stocks ?
you would have to pick another strike price, or expiration,
for the 2nd option
[at least not with IB]
you can do it with Stocks though [just not options]
marc
But I think I read somewhere that shorting and going long with the same stock can be "interpreted" by some authorities as "manipulating the stock price".no,
you would have to pick another strike price, or expiration,
for the 2nd option
[at least not with IB]
you can do it with Stocks though [just not options]
marc
And another problem with brokers is that they appy consolidation, ie. 100 short IBM and 100 long IBM just cancels each other out. But I have a special situation (trading system) where such consolidation is undesired. Don't know if there is any broker who does not consolidate.
Your trading system can act as if you have both on but the clearer will always show no position. For instance, you can be long AAPL on conviction but sell it on a daytrade. When you cover the sell you will be back to where you started, long again. Your trading system thinks you have two trades on, the long conviction and short daytrade. But your account shows 0.
no,
you would have to pick another strike price, or expiration,
for the 2nd option
[at least not with IB]
you can do it with Stocks though [just not options]
marc
The way around this is create a sub-account in IB and move money back and forth as you please
That of course makes no sense. A long (short) straddle can make sense depending on your view of future volatility. For example, a long straddle position can be viewed as a very crude trendfollowing strategy.