Ray Wollney

Using Options To 'Strangle' Apple, Research in Motion

He's not buying a straddle, he's buying a strangle. To be precise he's buying the Aug. 140 call and the

Aug. 130 put. However, John, you are precisely correct when you say the options from a theoretical

standpoint are overpriced.


The implied volatility on the strangle is approximately .55 when the historical volatility is much less.

Probably around .35 or so. Therefore the odds are in fact stacked against him. The strangle is probably

a sale not a buy. However strange things do happen and even though it's a bad bet he could get lucky.

Ray Wollney
optionspros.com