Market Measures

Monday – Friday | 9:00 – 9:20a CT

Straddles | Managing Winners

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Managing our winner has proven to increase our win rate and our overall profitability. We have also shown that managing a 1 standard deviation strangle at 50% of max profit has provided the best time to manage a trade. Knowing this, does the 50% management level apply to a straddle as well or since we are collecting a larger amount of premium, should we manage the trade sooner?

Today, Tom Sosnoff and Tony Battista look at a large study on Straddles to find out where they should look to manage their winning trades. The guys compare closing the trade when it has reached 50% of max profit to closing the trade when it has reached 25% of max profit. By closing the trade sooner at 25% of max profit, they were able to increase the total profits by 11% and had a win rate that was 16% higher. Additionally, by managing the trade quicker, they reduced the time they were in the trade by 40%!

Market Measures More installments

See All »

Latest tastytrade Videos As of June 17

Most Shared From the last 30 days