CoverIsBetter

An Options Trade on GM's Volatility

I guess in my above example, you would close it out yourself, but those Puts could still cost you something to get them back off the street, plus Commission, etc..

Thanks for the idea though.

An Options Trade on GM's Volatility

What if the perfect storm happens, and the stock goes to $4.00, you get Called on the Call leg, for a net loss of $1.00.

Then the stock falls to $1.00 and you get Put-To on the Put leg? Now you are about to go 100% loss on this trade idea.

I could be wrong, but unless you can force the whole clearing to happen at once, this could still lose a ton of your money. Please correct me, if I am missing something. Thanks