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I have been studying Don Fishbacks ODDS system of option trading and
would like to ask some questions of anyone who has any experience with
some of his ideas.
1. His technique of short and long strangles seems like it could make a
LITTLE money much of the time. But it also seems like the commissions
against such small profits might make it difficult to really come out
feeling too good about the effort.
2. His volatility based trading methods, as I understand them, say that
the direction of the market is less important than its volatility. That
is, if you perceive that an issue is going to move big, but you don't
know which way, you buy a put and call at strikes both above and below
the current price, then make your money on the big move. Conversely,
when the volatility suggests very little movement, you write puts and
calls and make the premium.
The whole thing is rather intricate, and very much different from the
more typical buying and selling that is most discussed here.
His ODDS indicator which is in 6.5 is very interesting, and may be a
good adjunct to other indicators. Does anyone know of a way to create
some kind of oscillator of volatility using his method of calculation?
Thanks,
Leo
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