If there was a time for straddles and strangles this would definitely be the type of market to play them with. However trying to play them on financials right now is just too risky at the current options prices. On friday I was thinking about stradding Wachovia on Oct $10 calls/puts. At the time it would have cost $7.25/share to do that. Even with the hit they took today I would barely be above break even. The risk/reward ratio is way too low to make straddles a viable play. But maybe it would be worth it for non-financial companies. If anyone has any good suggestions I would be glad to hear about them 🙂
