Straddles and Strangles - Volatility moves in any direction

Straddles and Strangles are non-directional strategies that can profit from big moves in any direction
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561 students enrolled
Instructed by Hari Swaminathan Business / Finance
$60
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  • Lectures 10
  • Contents Video: 1.5 hours
  • Skill Level Expert Level
  • Languages English
  • Includes Lifetime access
    30 day money back guarantee!
    Available on iOS and Android
    Certificate of Completion
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About This Course

Published 3/2013 English

Course 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

What are the requirements?

  • All the basic strategies and clear understanding of Vega and Volatility
  • Clear understanding of Theta and time decay

What am I going to get from this course?

  • 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

What is the target audience?

  • For intermediate to advanced Options traders
  • Must know credit spreads
  • Must know all the basic strategies and adjustments

What you get with this course?

Not for you? No problem.
30 day money back guarantee.

Forever yours.
Lifetime access.

Learn on the go.
Desktop, iOS and Android.

Get rewarded.
Certificate of completion.

Curriculum

Section 1: INTRODUCTION TO STRADDLES AND STRANGLES
09:09
Introduction to the Straddle and Strangle trades. Discussion of the similarities and differences between the two. 
Section 2: THE STRADDLE
20:42
Detailed analysis of a Straddle trade on Priceline (PCLN)
09:56
Setup of the Straddle trade on the SPY ETF. This is the trade we'll put in this course and monitor for its parameters
Section 3: The STRANGLE
10:45
Analysis of a Strangle trade on Priceline (PCLN)
05:55
Analysis of a Strangle trade on the SPY ETF
Section 4: THE STRADDLE TRADE - TRADE MANAGEMENT on the SPY ETF
04:29
Analysis the SPY Straddle - 1 day after the trade is placed
07:33
Analysis of the Straddle - Part 2
06:29
Analysis of the Straddle - Part 3. Study of the effects of Volatility crush
07:19
Analysis of the Straddle - Part 4. Tackling the negatives of a straddle
08:13
Conclusion and Learnings from a Straddle trade.
Straddles and Strangles Quiz
4 questions

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Instructor Biography

Hari Swaminathan, Options and Financial markets expert, Trader and Investor

Knowledge. Strategy. Execution.

Hari Swaminathan is the founder of OptionTiger, a cutting-edge Options education and trading company based in Washington D.C.. Hari is an entrepreneur, everyday person and a self-taught Options expert for over 8 years. Hari has a Bachelors degree in Engineering from India, and MBA degrees from Columbia University in NYC and London Business School in the U.K

More than ever, its become important for everyday people to take control of their financial situation, and create additional income in a smart, risk-controlled manner. This is precisely my mission. Through knowledge, education and investment discipline. Options are powerful, but they have a learning curve. I've broken down all the complexities of Options in simple language that everyone can understand. The courseware uses real trade examples, always highlighting the pluses and minuses of every investment situation. Options provide the best way to take advantage of bull cycles, bear cycles and everything in between.

As someone that has self-learnt Options and through making mistakes, 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 and not lose money during this time. 

Having said that, if you can get past the first 12 months and acquire the expertise in a systematic manner, true financial independence awaits. Options are a mathematical and strategic game much like Chess, and no amount of technological advances can make this skill obsolete, because the fundamentals of Options are never going to change. 

You can trade Options from anywhere in the world, regardless of how old you are. You never have to worry about job security any more because you have a skill that can produce consistent wealth month after month. 

But you have some serious but exciting work to do before you can get there, and I'm here to help you in this journey. 

Watch my Free Course for Options Trading Beginners where I draw out a detailed roadmap of what this 12-month journey looks like, and the specific strategies you should master during each step of this learning process. 

Watch my Free Mini-courses or my YouTube channel , all of which have the highest quality of education material. 

And join me in my UDemy courses, where I share cutting-edge theoretical knowledge mixed with practical insights, strategy and impeccable execution through live trading examples. 

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.

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