Quote from Xspurt:
Surf, so far PD's have caught some nice moves but sometimes in the wrong direction. Why not try an experiment with option straddles? If every time you got a strong move you were right, not because you got the direction right but because you got the impending volatility right, you'd have won on the YM and Oil and a lot of others.
Let's say you are right about oil pulling back and making a profit out of a big losing position. If you had a straddle you could close it now for a handsome profit and take a new straddle for the up move. If you are wrong in the direction because inventories hit new highs and oil tanks, you'll still be right.
If there is a black swan with NK shooting off a nuke you win. If the winter oil demand is dropping off and the jobless shows industry is slowing and oil is weak you win.
You'd have won on JCP and HLF. You didn't only lose on these, you lost time in waiting for the move to come in your direction so even when you get it correct you have to overcome more than losses, you have the fact your capital is underemployed while you wait for a losing position to come good.
I'm suggesting you play to your current strengths instead of playing with a weak hand. You might be an ace option player. It gives you time to discover why the PD's invert at times and point you in the wrong direction. If you crack that then you can forget about straddles.
If it turns out your have a strong hand in option trading, you can go on to develop some clever strategies. I'm not an option trader but I trade with someone who was an options market maker and can help you make the best of that idea if it appeals.
If your win percentage goes way up it impacts your MM so you can take a larger position and compound $'s faster. It's a two edged sword: right now your MM is working against you as well as your win % but you can easily turn that upside down from what I see.
