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I will do my best.
Have a look at NKE (US Market) and on the 9th of May 2005 you should
see the Bollinger Bands Squeezing together. This is the pattern I
look for.
Then I look for a straddle or strangle trade using stock options.
The following trade was placed on the 10th of May 2005
Buy 1 July 05 85Call @ 45
Buy 1 July 05 70Put @ 65
Total Debit 110
Trade Closed 15th of June 05
Sell 1 July 05 85Call @ 400
Sell 1 July 05 70Put @ 0.00 (or let it expire worthless)
The above trade was a Strangle trade, buying a call above the stock
price and buying a put below the stock price. This Squeezing pattern
doesn't happen all the time but when it does some good non-
directional trade opportunities can be taken.
Hopefully this is helpful
--- In equismetastock@xxxxxxxxxxxxxxx, rkgirs <no_reply@xxxx> wrote:
>
> Can you slightly explain, how to use it actually?
>
> --- In equismetastock@xxxxxxxxxxxxxxx, "sparkie1168"
<sparkie68@xxxx>
> wrote:
> >
> > Hi,
> > For those of you who like to trade straddles/strangles with
options
> > one pattern that works well, is when the Bollinger Bands start
> > squeezing together.
> > Have Fun with the Squeeze :- )))
> > To find the Bollinger Band Squeeze with Metastock create the 2
> > indicators below:
> >
> > BollingerBandHistogram
> > X:= ((C+2*Std(C,13)-Mov(C,13,E))/(4*(Std(C,13)))*100);
> > Blue:=If(X>80,X,0);
> > Red:=If(X<80,X,0);
> > Blue; Red;
> >
> > BB Squeeze
> > If(Fml("BollingerBandHistogram")>45AND Fml
("BollingerBandHistogram")
> > <55,1,0)
> >
> > Then create the below in your Explorer.
> >
> > Straddles/Strangles
> > EXPLORATION NOTES
> > -----------------
> > Finds Stocks that have the Bollinger Bands Squeezing Together
> > CALCULATION PARAMETERS
> > -----------------------
> > Periodicity: Daily
> > COLUMN FORMULAS
> > ---------------
> > ColumnA: Close
> > CLOSE
> > ColumnB: Squeeze
> > Fml("BB Squeeze")
> > ColumnC: 2DaySQ
> > If(Fml("BB Squeeze") AND Ref(Fml("BB Squeeze"),-1)=1,1,0)
> > ColumnD: 3DaySQ
> > If(Fml("BB Squeeze") AND Ref(Fml("BB Squeeze"),-3)=1,1,0)
> > ColumnE: 5DaySQ
> > If(Fml("BB Squeeze") AND Ref(Fml("BB Squeeze"),-5)=1,1,0)
> > ColumnF: 8DaySQ
> > If(Fml("BB Squeeze") AND Ref(Fml("BB Squeeze"),-8 )=1,1,0)
> > FILTER SOURCE
> > -------------
> > Filter Enabled: Yes
> > Formula:
> > colA>20 AND (colB=1 OR colC=1 OR colD=1 OR colE=1 OR colF=1)
> >
>
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