Straddles, are they ever profitable?

[OddTrader]

+1P + 50 stocks = +1C - 50 stocks = + half straddle
+2P + 100 stocks = +2C - 100 stocks = +1 straddle

They both are straddle options!

There is nothing called Half straddle options that you can find on the web or any options books, before today! Otherwise, which book, please?

https://www.google.com.au/search?q=half+straddle+options&btnG=Search&client=firefox-b

 

[JackRab]

They both are straddle options!

There is nothing called Half straddle options that you can find on the web or any options books, before today! Otherwise, which book, please?

https://www.google.com.au/search?q=half+straddle+options&btnG=Search&client=firefox-b

Obviously I meant it this way:
1 stradlle is 1 call + 1 put... So if you buy 1 put + 50 deltas in stock it's the same size as half a straddle...

Btw, Iv'e been an options market maker in Europe for 10 years, trading index options, single stock options, interest rate options... So yes... Obviously I have traded like that before....

 

[JackRab]

Wrong, again!

Obviously you've never actually traded like that before!

185 strike Call position = 80 delta long
Stock position = 100 delta short
Total position = 20 delta short
Which is the same as a 185 strike Put, with the same gamma/vega etc of the call...

That's why, if you sell the Put... your position is:
long 185 strike call short the 185 strike put = synthetic long underlying
short 100 delta underlying... = completely risk free position. No gamma, no vega, no delta...

 

[OddTrader]

imo, a correct description of put call parity can be found here:

https://en.wikipedia.org/wiki/Put–call_parity

 

[OptionGuru]

You guys are obsessed with the option greeks .... so much so you can't see the forest through the trees.

• The original question is simple: Straddles, are they every profitable?
• The answer is simple: Yes they are ... if the underlying moves as you predicted.

You guys can now get back to your option greek gobbly goop circle jerk discussion. Have fun.

 

[OddTrader]

Good luck to both you and me! We'll find all that out from actually trading the markets!

 

[JackRab]

You guys are obsessed with the option greeks .... so much so you can't see the forest through the trees.

• The original question is simple: Straddles, are they every profitable?
• The answer is simple: Yes they are ... if the underlying moves as you predicted.

You guys can now get back to your option greek gobbly goop circle jerk discussion. Have fun.

I know, I just can't stand it when people start saying things that are incorrect... there's too many people following bad advice...

 

[OddTrader]

I know, I just can't stand it when people start saying things that are incorrect... there's too many people following bad advice...

Very well said indeed!

 

[OddTrader]

So if you buy 1 put + 50 deltas in stock it's the same size as half a straddle...
.

Deltas is used to measure options!
http://www.investopedia.com/articles/optioninvestor/03/021403.asp

Every single stock has 100 deltas, isn't it true!?

Where can we find a stock (or futures) of 50 deltas to buy? Personally I can't!

In other words, a straddle of "buying 1 put + 50 deltas in stock" would never exist/happen in real world trading!

 

[sle]

Only botpros threads are worse.

Did I miss those in my years out?

Are the risks of an options strategy the same that costs 50 dollars and a UPS overnight package that may also cost 50 dollars? Come on, you guys can do better than that.

Oh, come on - in this context, the same strike/tenor and ATMFish strike, it's a totally ok to think it terms of premium paid. In fact, the moment you you live in a unit-tenor world, extrinsic premium is the best proxy to theta, which in turn is the best proxy to general risk.

OK, Asian day is over and I am off to bed...