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Chapter 6. Eight winning option trading ... > In “normal” markets, write straddles...

6. In “normal” markets, write straddles and strangles

Selling puts and calls works in most market environments. It is a good strategy, as long as it is managed properly. “Normal” is a term I am unable to define specifically for you; it's a feeling you will develop after trading for a while. In most cases, the premiums received when writing straddles and strangles give an adequate cushion to weather most storms. However, when the typhoon hits and your margin starts to feel impaired, run for the exit door.


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