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Volatility
strategy - the Straddle
Having no idea which direction a stock price is likely to
move in, doesn’t sound like a great basis for a trade, based
on traditional views on trading and investing. However, this
backdrop is exactly what we use for setting and applying
this powerful trap for exploiting what we refer to as a
“volatility break out”.
Over the many decades that we have been around markets,
trading professionally, we have identified key times when to
set the Straddle trap. Though not often, when correctly
executed, this can be a powerful way of generating returns,
while at the same time, having a predefined level of risk –
once again meeting our stringent criteria at Elite Options
Mastery.
Such times include news announcements, annual results
publications and other more specific special situations that
provide an opportunistic scenario for profit and cashflow
generation, typically missed by many investors. Stepping out
of the crowd is what we look to do at Elite Options Mastery
and the Straddle is just another way that we actively do
this.
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