The flailing US economy has been putting a big frown on my financial status. Some how I managed to enter the market at a time when most companies were hitting 52-week highs, only to find out that about two weeks later, a strong pull-back began to ensue.
If lets say I entered the market three weeks later, I would essentially be picking bottoms, or at the very least, getting a chance to buy companies on the cheap. I would even settle for getting in earlier in the year, before the big run-up, so that I would have some nice cushion to fall back on.
But no, I got in right before the storm, and it wiped me out.
I am not poor, or broke, just yet, but it would be nice to earn some extra money ya know. :)
Anyways, I am trying this new strategy that my friend got me convinced on it. It’s called “straddling”.
Basically you buy both the “call” and the “put” options of a company right before a time of high volatility, such as earnings, news, etc… No matter which direction the stock price move, you stand to gain money because you are invested in both directions. This works best when one side moves a lot more than the other side, and you are able to get rid of the loosing end for a nice exit point, while riding the winning side to a nice profit.
Yea, I have no idea what I am doing. It just sounds logical? (and fun!) :)