tonite, page-11

Straddle is basically a volatility play using derivative based products.

When I see a holding pattern and with volatility falling to low.. ideal is that volatility is very low as you trade the volatility spike.

In XJO's case you go long 1000 XJO and short 1000 XJO...upon a break of price and spike in volatility one of those legs deteriorate in value, so you sell it as the other leg gain in value 1:1. The rationale is to ride the winning leg in the direction where volatility is spiking at.

Probably too early to set up a straddle play on the XJO...one more week of sideways action will see volaility fall abit more.