Straddles and Strangles - Volatility moves in any direction
4.3 (56 ratings)
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Straddles and Strangles - Volatility moves in any direction

Straddles and Strangles are non-directional strategies that can profit from big moves in any direction
4.3 (56 ratings)
Instead of using a simple lifetime average, Udemy calculates a course's star rating by considering a number of different factors such as the number of ratings, the age of ratings, and the likelihood of fraudulent ratings.
814 students enrolled
Created by Hari Swaminathan
Last updated 5/2017
English
Current price: $10 Original price: $60 Discount: 83% off
5 hours left at this price!
30-Day Money-Back Guarantee
Includes:
  • 1.5 hours on-demand video
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
What Will I Learn?
  • Understand the Straddle and Strangle trades
  • Why these strategies are categorized as Non-directional and Volatility strategies
  • Clearly understand the negatives of a Straddle
  • Master the art of adjusting and closing these trades
View Curriculum
Requirements
  • All the basic strategies and clear understanding of Vega and Volatility
  • Clear understanding of Theta and time decay
Description

STRADDLE & STRANGLE OPTION STRATEGIES

Straddles and Strangles are also Volatility strategies and are very popular strategies. Both these strategies are non-directional, so its possible to profit from a movement in either direction. But the move must come fairly quickly, because we have two Long Options (one on the Call side and one on the Put side), and so our time decay exposure is doubled. Additionally, Vega exposure can be quite large, so this is something to watch for. In general, its best to put on Straddles and Strangles in times of low volatility as measured by the individual Implied Volatility of the stock itself as well as observing the level of the VIX Index. We also look at the "Valley of Death" where the trade can fall into trouble.

Straddles and Strangles fall into two categories of Strategies - 1) Non-directional strategies and 2) Volatility strategies.

 In non-directional strategies, you don’t care if the Stock goes up or down. Your strategy profits from a move in either direction. The strategy starts out Delta Neutral – or at least you should try to construct it that way. But this does not mean your position will remain Delta neutral forever. In fact, your position will achieve a +ve Delta or a -ve Delta bias, depending on the stock’s movement. But these strategies have one clear advantage over others. You don’t have to be right in forecasting the direction of stock movement, and that fact alone put Straddle & Strangle strategies in our Favorites.

What you will master

  • Why are Straddles and Strangles very popular
  • The pluses and minuses of these strategies
  • Why these strategies can be deceiving for newcomers to these strategies
  • What is a good environment for these trades
  • What is the difference between a Straddle and Strangle
  • Is one better than the other in certain situations
  • What are the advantages and disadvantages of these trades
  • Why is Vega exposure critical
  • What is the "Valley of death" and how can we avoid it
  • Detailed analysis of the Straddle setup using Priceline and SPY ETF
  • Actual trade execution of the SPY Straddle
  • Trade Management of the SPY Straddle
  • Adjustments to the SPY Straddle
  • Learnings from the Straddle trade
  • Tackling the negatives of the Straddle

Who is the target audience?
  • For intermediate to advanced Options traders
  • Must know credit spreads
  • Must know all the basic strategies and adjustments
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Curriculum For This Course
11 Lectures
01:34:46
+
INTRODUCTION TO STRADDLES AND STRANGLES
2 Lectures 13:25
Introduction to the Straddle and Strangle trades. Discussion of the similarities and differences between the two. 
Preview 08:12

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THE STRADDLE
2 Lectures 30:38
Detailed analysis of a Straddle trade on Priceline (PCLN)
The Straddle Basics - Analysis of Priceline Straddle
20:42

Setup of the Straddle trade on the SPY ETF. This is the trade we'll put in this course and monitor for its parameters
The Straddle Trade setup on the S&P 500 ETF (SPY)
09:56
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The STRANGLE
2 Lectures 16:40
Analysis of a Strangle trade on Priceline (PCLN)
Analysis of a Strangle Trade - PCLN
10:45

Analysis of a Strangle trade on the SPY ETF
Analysis of a Strangle trade - S&P 500 ETF (SPY)
05:55
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THE STRADDLE TRADE - TRADE MANAGEMENT on the SPY ETF
5 Lectures 34:03
Analysis the SPY Straddle - 1 day after the trade is placed
Straddle Trade - SPY 1
04:29

Analysis of the Straddle - Part 2
Straddle Trade - SPY 2
07:33

Analysis of the Straddle - Part 3. Study of the effects of Volatility crush
Straddle Trade - SPY 3
06:29

Analysis of the Straddle - Part 4. Tackling the negatives of a straddle
Straddle Trade - SPY 4
07:19

Conclusion and Learnings from a Straddle trade.
CONCLUSION - Straddle Trade Exit
08:13

Straddles and Strangles Quiz
4 questions
About the Instructor
Hari Swaminathan
4.3 Average rating
3,795 Reviews
30,307 Students
29 Courses
Options Mentor, Financial markets educator, Trader, Investor

Knowledge. Strategy. Execution.

Hari Swaminathan is the founder of OptionTiger, a cutting-edge Options Mentoring company, and a full-circle educator in all areas of Financial Markets, Hari has developed several proprietary Intellectual Property "methods and approaches" around enhancing base case Options strategies (which favor the Market Makers) and turns that deficit into a massive EDGE on the trader's side.. Like building a powerful Strategy "for all Option Strategies". 

Hari is self-taught in Options and actively trading these instruments for almost 10 years, mostly through trial and error. Trial and error in general, is an excellent method of learning, but applied in this context, trial and error CAN BE EXPENSIVE. My courseware focuses on this aspect mostly, so you can avoid losing money in the 1 to 2 years when you're learning. Yes, it does take that long, if not more. If the markets were indeed simple, you'd have everyone involved in it. Patience, Diligence, and Determination are what you need during this time.

Hari has a Bachelors degree in Engineering from India, and MBA's from Columbia University in NYC and London Business School in London UK. 

More than ever, its become important for normal people to take charge of their financial situation, and truly understand how financial markets, and the various asset classes, trading nuances really work. Investing in the financial markets is no longer a HANDS-OFF ACTIVITY. There's no point blaming financial advisors after the fact. Now, it's become crucial for everyone to do "their OWN homework", so you can decide for yourself whether something is good or risky. This is of course easier said than done, and that's exactly where we come in.

My mission is to educate everyday people on the deep, strategic underpinnings of the stock markets, and exploit that knowledge with the use of OPTIONS.  THERE IS NOTHING RANDOM about the markets. There are surprises all the time, but there's always a method behind every madness. And my goal is to get you to this point of understanding and awareness. That's when it starts to fit in. 

Knowledge, Education, Crafting Breakthrough strategy, Technical analysis, Following Smart Money, Risk management, Disciplined Money management, and near flawless Execution approaches are just a few of the crucial points emphasized in all the Courses. Video-based education courseware, Practical workshops, several elite proprietary Advanced systems, a 4-week Live Mentoring program are just a few things we offer. The goal is to provide a "full circle" education in the Markets, which is necessary before it starts "fitting in". 

Let's break down the Options game in a realistic manner. 

The Pluses

1. Options were invented out of thin air. And the people who invented them won Nobel Prizes for their invention (Fisher and Black). It is purely a "Mathematical" concept. 

2. This gives rise to very complex but interesting  analytical scenarios. It also gives us the ability to model Options with a set of tools like a car dashboard. This data is embedded in the mathematical formulas that underpin Options structure itself.

3. Because everything in Options is defined in mathematical terms, its also important to realize that OPTIONS will always be the same. Forever. Unless they discover serious flaws in the formulas and models used by these Nobel winners. 

4. Options and Chess have LARGE overlaps. You may agree that Chess is a game of "skill". It's a game of Strategy and depends upon how well you can plan (ahead) to attack, defend or take a neutral position. We also believe that Chess is strategy-focused and depends upon certain mathematical principles. Why or How do we know this - The reason we know its a game of skill is : Try to play 100 chess games with Kasparov or Anand. Normal people are almost guaranteed a loss in all 100 games. So it has to be a game of skill. And why do we know its underlying features are mathematics based. The fact that a computer like Deep Blue beat the GrandMaster Garry Kasparov in 1997.

5. Lastly, You MUST believe this completely -  Options, just like Chess, are a "skill set", and requires acquiring a deep set of analytical skills much more so than most skill sets in the world, and THEY can only be MASTERED over a period of time. Once you understand Options better, you'll realize how true this is. But, there is a very powerful light at the end of this tunnel. You build a skill set for life.  Age, Geographical location, Lifestyles, or Weather are no longer a barrier to creating consistent income streams, regardless of who you are, where you are, or how old you are. 

This is very POWERFUL stuff. 

Now let's look at the negatives. This is what most people will NOT tell you. Anyone that tells you Options are SIMPLE, and you can make extra ordinary income easily, is JUST NOT TRUE. I will tell you Options can be brutal if you simply apply speculative methodologies. And once you can develop a SYSTEMATIC approach to every situation (which is the Real Game), you'll be well on your way to consistent performance.


MINUSES


Options are easily the most fascinating financial instrument with several upside benefits, but also an equally powerful set of negatives. 

1. Options have a steep learning curve. Don't expect to become Kasparov in a couple of months. Market Makers who are 99% of the time, the counter party to all Options trades, are Options professionals, with 10 to 20 years of experience, in performing their "legal duty" of providing liquidity. 

2. If you're interested in Options, try NOT approach it with a mindset or requirement of making money. This is not only NOT going to happen, but its a recipe for disaster. It's like a student of Medicine wanting to practice their skills after 2 months of study. 

3) As someone that has self-learnt Options and through making mistakes from Trial and Error, I can tell you Options trading is not something you should take lightly. You will hear people talking of fantastic triple and quadruple digit returns. I'm here to be brutally honest with you - 

- Be very very careful in the first 12 months of Options trading. 

- This is when everyone is the most vulnerable to losing money. 

- Your main objective during this time is to focus on learning this craft 

Having said that, if you can get past the first 12 months and acquire the expertise in a Systematic manner with Systematic approaches to every situation, true financial independence awaits. But you have some serious but exciting work to do before you get there, and I'm here to help you in this journey. 

And join me in my UDemy courses, where I share cutting-edge theoretical knowledge mixed with practical insights, strategy and impeccable execution approaches, through live trading examples. How do we know it's all this (don't just go by my word). Check what 30,000 students have to say in 3100 Reviews, with almost 2800 of them being 5-Star or 4-Star

If you have any questions at any time, please feel free to message me on Udemy.

The order to follow on my Udemy courses

Comprehensive guide to Financial Markets, Investing and Trading

Options Trading Beginners Bundle (3-course Bundle)

Advanced Options Concepts

Options spreads and credit spreads Bundle

Technical analysis and Chart reading Bundle

After this, the order does not matter. You can take any of the courses as per your interest.