The Options Box

[Poet]

Hmmm, if I remember correctly, a straddle is advisable when you don't expect much movement in the stock, so if you think the movement will be sideways, then it's the way to go. The nice thing about straddles, strangles, etc. is that volatility doesn't matter since the cost of the option you buy is offset for the most part by the premium you take in on the sold option.

That's a shame about the margin requirements on naked puts. I made a bundle with that strategy a few years ago, but they've really tightened the rules.

Selling naked calls is the ultimate in risk. I had my a$$ handed to me just once when a trade went against me in a matter of hours. I never sold calls naked again.