Make a bet on both sides before Brexit news

luckystar2006

Brexit news might have a lot of impacts on market within that particular day.  So, is it a wise idea to place both calls and puts at the same time where returns from one bet will exceed loss from the opposite bet?  Is anyone having the same sort of thoughts???

lite1067

options are already very expensive due to brexit..... it is hard to make straddle work this time, unless the impact from brexit on the market is really bigggggggg. how do you think, master?

luckystar2006

lite1067 发表于 2016-6-20 10:11 PM
options are already very expensive due to brexit..... it is hard to make straddle work this time, un ...

I'm thinking of buying a small amount of calls & puts (let's say 50 contracts on each side) with next week expiration date, which I'm okay to incur losses if those trades don't work out well.  However, I'm somewhat feeling uncomfortable doing this because such strategy is about gambling.

superxy

with IV coming down after vote, options value will drop a lot on both sides

oldwolf

同时买call spread和put spread能解决iv的问题。
这个大概叫condor spread。

投资人

Yes, if the movement after the Brexit vote is huge, just like a earning issue. But in most of case, the movement is priced-in in the premium. The implosion of IV will make it unlikely to profit by buying a straddle before such event.  Statistically, ATM straddles lose money. But I DO see some people to profit the event by legging in the straddle separately  many days before the event. I am not a fun of it. If I am going to play a delta neutral game on Brexit, I would rather choose to credit some DOTM ion condors.