Download software Tutorial videos
Subscription & data-feed pricing Class schedule

New account application Trading resources
Margin rates Stock & option commissions

Attention: Discussion forums are read-only for extended maintenance until further notice.
Welcome Guest, please sign in to participate in a discussion. Search | Active Topics |

Strangle your option not your broker - Strangles a Squeeze Rate this Topic:
Previous Topic · Next Topic Watch this topic · Print this topic ·
Posted : Monday, August 7, 2017 1:07:14 PM

Registered User
Joined: 6/30/2017
Posts: 1,227

First, my option spread experience to date includes vertical debit and credit spreads. Strangles and straddles are outisde my wheelhouse at the moment. Hence, this post. :)

Second, I'm loving Bruce's TC2000 implementation of the TTM Squeeze. 

Regardless of whether I'm looking at a TTM Squeeze, original classic Bollinger Band Squeeze, or other low volatility squeeze setup, I usually look at previous price action and/or a larger timeframe to make an educated guess about which way the squeeze will break ... then I use a vertical debit spread to decrease my cost and lower my breakeven. It's still a directional play though, and of course there are no guarantees about which way price will break out of a squeeze. You can wait to see, but the longer you wait the more of the move you miss. There are also those pesky squeeze breakout "headfakes".

So, my question for folks who know their way around a strangle...

What are the pros and cons of using a strangle in a low volatility environment? I was watching a video (link below) that made it sound easy peasy. This way you don't even need a directional bias - you don't care which way it breaks.

It can't be this easy. What am I missing?

Using a Strangle on a Bollinger Squeeze

Users browsing this topic

Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.