Change in strategy instead of a ratio of 2-1-1 for selling a call or put and buying a call and a put.
We now have even distribution, of 1-1-1-1
Here are the trades to make a proper straddle.
1 trade that sells a call at a value of 10,000 on the bid
1 trade that sells a put at a value of 10,000 on the ask
1 trade that buys a call at a value of 10,000 on the ask
1 trade that buys a put at a value of 10,000 on the bid
This in theory should cover the stock if it travels flat, up or down and will both preserve cash and make it if it moves far in any direction.
I BELIEVE THIS WILL WORK TO OPPOSE DIRECTIONAL RISK !!!
The only weighting that isnt factored in is the implied volatility
and therefore the premium in the options price, if the stock has
been rising for a bit the premium is high in the calls, and
dropping puts etc. so this will not make the straddle a perfect
balanced risk trade but lets see how close it can protect and
gain.
