Re: FUT: Option trade in Jan. beans

["RAY RAFFURTY" <rraff@xxxxxxxxxxx>]

-----Original Message-----
From: Walt Downs <knight@xxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Sunday, September 06, 1998 10:03 PM
Subject: Re: FUT: Option trade in Jan. beans



>I have been watching Beans closely because of the situation you
>mention. How I have been handling it, is to buy ATM straddles
>every time the vol hits historical lows. If the market continues
>to break down (As it has done for months now) liquidate the profitable
>put and hold the call. In this way, you can amass a powerfull long
>position with little out of pocket.
>
>Using this strategy I think I am long 20 or 30 calls. If the market
>never recovers in time, it doesn't cost me anything. If it explodes
>up, I'm RICH. <g>


        Hi Walt,

        What an interesting strategy.  Do you apply it in low volatility
situations only?  Imagine if you had used it on the S&P the last few weeks
(Globex is up 20+ when I last looked).  This would have made Gary's famous
trade look like fishing for loose change {;-)

                                        Good luck and good trading,
                                                    Ray Raffurty