Scottrade only allows one put or one call per stock symbol. So if I want to play the Nasdaq in a straddle, I need to play two different stock symbols representing the Nasdaq. I was thinking NDAQ and QQQQ, with a put on one and a call on the other, say for February? What are your thoughts on this?
2007-12-21 14:49:35 · 3 answers · asked by Anonymous in Business & Finance ➔ Investing
There is no need to use two different underlying issues.
You can create a synthetic long straddle two different ways.
(1) Buy 50 shares of QQQQ and buy 1 put option.
(2) Short 50 shares of QQQQ and buy 1 call option.
Either of these methods has the same risk/reward profile as a long straddle.
2007-12-21 16:16:07 · answer #1 · answered by zman492 7 · 1⤊ 0⤋
My only thoughts are that you should have shopped around for a better brokerage company. I went with Thinkorswim. Not only does TOS have the very best analytical tools out there but they DO NOT limit your trades. Scottrade, Etrade, Sharebuilder, they all suck in comparison to Thinkorswim.
2007-12-22 08:58:52 · answer #2 · answered by Barney 6 · 0⤊ 0⤋
zman is absolutely correct in the synthetic trades.
If Scotttrade really does not let you trade both puts and calls on the same symbol, then you need a better broker.
2007-12-22 00:43:46 · answer #3 · answered by A5150Ylee 4 · 0⤊ 0⤋