Options Wonderland

[leemalone2k3]

Sure,
This strategy is useful to me as follows. During high volatility, enter the long position. As long as the trade is in your favor, hold that position. If the trade starts to turn against you, then take your short position. Cover the short for a small profit when the trade starts to turn in your long favor again and hold the long position. Now you have essentially lowered the cost of your long position. Do this over and over and your long is eventually paid off by trading the short side on turns. This usually prevents you from having to take a loss if a long position goes against you and also allows you to profit in both directions as a stock whipsaws. Enter the lo ng position ATM or slightly OTM.

During low volatility either leg into the trade or enter the vertical as a single trade. Take the long position in the money and the short position at the money. That you you can take a profit even if the stock stagnates and maybe even if it goes against you a little bit.

Critical points:
I'll usually leg into the trade. Always enter the long side first. Enter the long side at support and the short side at resistance if playing a bull call or put vertical. Enter the long side at resistance and the short side at support at support if playing a bear vertical.