Scottrade will only let me do one put or one call per stock symbol. The problem is that I want to play the Nasdaq in a straddle and to do that I need to play two different stock symbols representing the Nasdaq. I want to play QQQQ and NDAQ with a put option on one, and a call option on the other. Does anyone know if this is possible with Scottrade?
You don’t have to use two differently stock symbols to execute a straddle on the Nasdaq.
There are two different ways you can do a long straddle on the Nasdaq.
(1) Buy 50 shares of QQQQ and buy 1 put option.
(2) Short 50 shares of QQQQ and buy 1 call option.
Both of these methods has the same risk/reward profile as a long straddle.
More on this topic
(What's this?)
Oh by the way, the QQQQ's almost at the 200-day moving average
(UnBiasedTrading (TM), 4/24/09)
Example of some things QQQQ investors/traders are looking at in technical analysis today
(UnBiasedTrading (TM), 4/24/09)
March 31 2009 SBUX / QQQQ
(Trading with the Average Jay, 3/31/09)
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If Scottrade really does not let you trade both puts and calls on the same symbol, then you need a better broker. I don’t think that is the case. Just call your nearest local Scottrade office and ask. All online brokerage firms let you do straddles. I think the problem you are having is not with the straddle, but with the authorization level assigned with your account. You have to fill out special paper work for an options account along with a margin account that says you know the risks associated with options trading. Also are you trying to do a naked straddle or do you hold the underlying shares in each stock? That could be the problem you are having. Call Scottrade and find out.