Strangles & Straddles

RainMaker3000 · Jul 10, 2002

let's talk about trades that make short term Strangle & Straddle plays

RainMaker3000 · Jul 11, 2002

straddle GE @25 & @30

entry price - Put @25 = $60
Call @30 = $25
Cataylst = earning call , Friday before the open

rs7 · Jul 11, 2002

Originally posted by RainMaker3000
straddle GE @25 & @30

entry price - Put @25 = $60
Call @30 = $25
Cataylst = earning call , Friday before the open

Don't have option quotes right now...what expirations? Also am I reading these prices wrong? How can a 25 put be worth $60? Wouldn't the stock have to go to Negative 35 to be in the money? What am I missing? Also, do you expect an $85 move on earnings? I am sorry for sounding dumb. I know I have to be misinterpreting what I am seeing here.

RainMaker3000 · Jul 11, 2002

July , expire next week, we'll see if GE moves after the earning call

THe calls are trading @$30 and the puts @$55 right now

rs7 · Jul 11, 2002

Originally posted by RainMaker3000
July , expire next week, we'll see if GE moves after the earning call

THe calls are trading @$30 and the puts @$55 right now

I guess I am misreading the whole thing...what strike prices are you talking about....maybe I got your prices mixed up with strike prices...only thing I can think of.

RainMaker3000 · Jul 11, 2002

The trick is your put and calls act like a hedge, therefore if its a bad call you go short on the stock and you're covered by the calls, and if its a good call , you go long and are covered by the puts, it a double plus, plus if something happens after the call your hedged

rs7 · Jul 11, 2002

Originally posted by RainMaker3000
The trick is your put and calls act like a hedge, therefore if its a bad call you go short on the stock and you're covered by the calls, and if its a good call , you go long and are covered by the puts, it a double plus, plus if something happens after the call your hedged

Uhhhhh... ok...but what are the strike prices? And isn't the stock at 27? What am I missing?

RainMaker3000 · Jul 11, 2002

earning before the open, if its good it'll rally over $30, if not i see it breaking down below $25

rs7 · Jul 11, 2002

Originally posted by RainMaker3000
earning before the open, if its good it'll rally over $30, if not i see it breaking down below $25

OK..one last time..
tell me the STRIKE prices of the calls and the puts and the cost of the options so I can understand....please???

RainMaker3000 · Jul 11, 2002

Strike CALL = 30
PUT = 25

Price call = $25
Put = $60

expire July 20