So I'm thinking maybe it's time to buy some puts in these Inverse Double Latte's, Then I look at the SKF board and ....whoa. Hair raising.
The Dec. 240 straddle, roughly ATM not, is about $109. Yes, that's $109 for a straddle with 29 days to go. 4 of them being a long weekend next weekend, although hard to make a case the Thanksgiving break will mean anything this year.
But hey, if that seems pricy, consider the November 240 straddle, That's now $34. It expires tomorrow.
You'd think buying the Dec. vs. shorting the Nov. makes some degree of sense, I mean conceptually if you're getting a third of the price back in under 2 days of trading, what can go wrong?
Well, volatility is insanely volatile. As is the stock right now. Where would the Dec. straddle trade if SKF moves 30 from here? Or 40 from here, or 60 from here? That's the question you have to answer.
