This segment of Options Jive discusses what a whipsaw is and how to defend against it.
A whipsaw is a trade that moves sharply in one direction but then reverses in the opposite direction shortly after. We have found that lower delta strangles have a lower chance of experiencing whipsaws. Therefore, one way to defend against whipsaws is to trade lower-delta strangles. Yet, this strategy does not protect against all whipsaws. When faced with a whipsaw, we can still roll as a defense strategy.