re: fold line - rio test case jermayne - from my point of view -...

re: fold line - rio test case jermayne - from my point of view - with trading options ,for long term profit, DON'T buy short dated options. Its really akin to gambling. You buy longer dated options and wait for confirmation of a directional movement. So in the case for BHP buying both calls and puts IMHO this is just gambling. You don't really have any idea on the directional movement yet you continue to trade. Why ? Noone is forcing you to trade so you could just wait until the perfect environment occurs. If tomorrow the shares drop then it would be likely that they will continue to fall throughout the next couple of weeks. You may not attain as great a percentage return in profit but you will have minimsed your risk.

This is particularly the case in the long term - if you want to trade as an occupation.

Volatility, time decay and the like are important but won't help you at all if you get the direction wrong . .. .

KMan