"~FAnTA$tic DD ~"

[RonnieD]

I am not a straddler. I place on what I believe the market will do, one way or the other, and check my bets by lowering the amount instead of buying insurance on the other side.

In premarket, FAS is moving up and FAZ is moving down. Today's another big day for financials. More Geithner, more Obama. Senate today.

If you want to straddle, I would place more weight in FAS but not the March, get to April at least. From these depressed levels I see financials creeping upward. With the mkt begging for a financials recovery, if you want to sell calls, sell March 6's.. not 5's.. it's already 4. Better to get less $ on writing calls than to lose your stock. Keeping your stock is key because it lets you write again the next month. It's your moneymaker to keep the stock. Try not to let it get called away.
Rather than buy 100 FAZ, just buy some uncovered puts against FAS if you want to play both sides. That way, you're not stuck with spending $7600. There is a lot of downside in FAZ. More downside than selling a call option will cover against.
You can also just play FAS, buy the equity, and sell calls. That's a way of checking your bet without ever touching FAZ.
For the 100 shares of FAZ you can get 19 times more FAS. 19x more call writing power.
Then check your bet by selling FAS calls and using that $ to buy mere hundreds of $ on FAS puts or FAZ calls instead of going long $ 7600 on expensive and vulnerable FAZ equity.