In simple terms a STRADLE means you buy puts (underlying price to go down) and calls (underlying price to go up) on the same stirke price...in this case 1.50...as the price goes up...you close out the call options for a profit and when the price goes back down....you sell the put options for a profit....
Works really well in volatile markets where you expect big moves above and below your strike price before expiry of the options...
Also works well if you are not confident on which way the market will bounce as is the case today...
I only trade with 10 Companies / indexes as I get to know them really well and have a better gusetimate on how they behave...
Today most of my options are being "Very Naughty"
haspete's - someone let brutus out - wednesday, page-41
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