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Sparkie - you may also want to check out the MS ODDS and analysis by
Fishback. Came with the software. Do a Explore and see what you find
on low volatility set-ups for straddle/strangle .. just came off a
winning AIG trade that way.
--- In equismetastock@xxxxxxxxxxxxxxx, "sparkie1168" <sparkie68@xxxx>
wrote:
>
> 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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