Formerly NE North Dakota, now NW MN | It's funny how people can look at the same thing and and have totally opposite reactions.
As I was reading your post I was thinking, "yeah, ya know he's really onto something, we're kinda just going sideways-ish right now, we should have a breakout and increase in volatility soon enough, I think a long-strangle probably makes a lot of sense here", until I read your last sentence and realized your were advocating a short strangle. In reality, depending one what a person is looking to do, both approaches could probably be justified here.
If you are a farmer with a lower risk tolerance, but still think volatility will likely decline here, I think an iron condor is probably a more appropriate solution.
http://www.theoptionsguide.com/iron-condor.aspx
At least then you are in there with a defined risk instead of just "lettin' it all hang out". |
Strangle it!
