strangle calculations

[patefern]

Been trading long strangles on stocks to sell premium. Using lognormal distribution charts, standard deviation, ATR, and support/resistance levels to try to convince myself it is other than luck when a stock moves to point X.

Are there any calculations that can be made that can enhance this strategy?

 

[ArchAngel]

How are you "selling premiums" if you're "long strangles"?

 

[patefern]

Quote from ArchAngel:

How are you "selling premiums" if you're "long strangles"?

Stock at 34.13, long the Aug 37.50 puts, long the Aug 32.50 calls. Sell the 32.50 puts on a drop and sell the 37.50 calls on a run up.

 

[ArchAngel]

You're not really "selling premium" by trading long strangles then - your just legging into up to two different spreads.

 

[GATrader]

could qualify as scalping gamma.

 

[patefern]

Thank you for the clarification, it was a misspeak when saying "selling premium", but you get the point.

I have strangles on for the earnings period and the ones I picked were for volatility and premium. Some may have been better as short strangles or long straddles and I thought some discussion might be enlightening.