Interesting approach...I have actually traded diagonal spreads by initially purchasing the long leg and only selling the short leg after it goes against me to the point where I would have set an equivalent stop loss. In the cases where you get a runner, you're in a long option only, so you're good to go. Since my stoploss is usually fairly reasonable, the short leg doesn't lose too much value when it moves against me. In that case, I'm pretty much at square one...and in my experience, the benefit you get from playing those runners outweighs the losses you incur from letting the short leg premium drop a bit.
Buying Calls/Puts instead of trading underlying?
- Thread starter daniel_tysen
- Start date
No of course not, but if there's a better way for me that would be fine, too
I always carefully analyze every trade first. If the trade would become a loser, then I don't take it...Quote from spindr0:
Well you know, if it takes 7 days for your move to develop, wait 5-6 days before taking your position
