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Ultimate Guide to Managing Straddles

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.

With the recent flip flopping between high and low implied volatility environments, Tom and Tony set their sights on management techniques in either environment with the straddle strategy in mind. We use the straddle when opportunity is present in:

The guys filter for past occurrences of straddle trades in the S&P 500 (SPY) by IV Rank over and under 50%. After doing this, they manage each trade at 25%, 50%, 75%, and expiration to see what strategy was optimal. Take a look at the results in the segment above.

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