Speculation
Inside the body of this 68 year old prudent and careful investor, lies the heart of a fourteen year old day trader crying to get out.
I could not resist any longer. I bought a straddle on the market - the NASDQ 100 to be specific. If the market goes way up after the election or goes way down after the election, I make money. If it stays the same, I lose. My hunch is that we will not know the election results for a week or so and that uncertainty will drive the market down.
You do not know what a straddle is? Google it!
posted by James Moule @ 3:28 AM
2 comments
2 Comments:
straddle
The purchase or sale of an equal number of puts and calls, with the same strike price and expiration dates. A straddle provides the opportunity to profit from a prediction about the future volatility of the market. Long straddles are used to profit from high volatility. Long straddles can be effective when an investor is confident that a stock price will change dramatically, but cannot predict the direction of the move. Short straddles represent the opposite prediction, that a stock price will not change.
See Also
combination, long straddle, short straddle, strap, covered straddle
Jim...You just knew I'd go googleing didn't you? Dave in Indianapolis
For the record, thsi straddle worked out. I doubled my money. My hunch was dead wrong. Instead of going way down, the market went way up. But, the way straddles work, that was just as good as going down.
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