Stopped out of puts at 126.  Loaded back on calls <_<
Going to add puts back in at end of day or near 127 to reset my straddle.

Just thought I'd share and outline the strategy I've been using the last few weeks to profit on the market no matter what direction the market goes.  That and incase I forget because I tend to forget what I say in the middle of the week. 

This is almost a win-win strat IMO so feel free to use it yourself (and let me know how it goes ).

Options Straddle on Volatile Markets
I'm mainly buying both calls and puts to form what's called a "straddle."  Basically you can lose 100% on one side but you count on the other going >100%; the best part is you don't have to care what direction, just the magnitude of the move.  For the index, I choose either SPY or FAS, depending on where I think the focus will be (read the news); SPY is general market while FAS leans toward financials.

This is a summary of the technical analysis I go through to set up the straddle:
- Check 30-min bollinger bands for pinch to see what days will gap. (last few weeks, it's pinched mid/end day and then gapped that night).
- Buy equal positions (in dollars, not contracts) on ITM calls/puts at end of day because decay eats up a lot during sideways movement intraday.
- Sell next morning, often at about 10:30-10:45am EST.  After 11am EST, market usually dips or trades sideways until ~3pm EST.

It's worked very nicely for me so far.  Usually count on the overnight gap being big enough for one side to go >100%.  If not, the losses are pretty small also (if the market doesn't gap enough or trades flat).  But just make sure to follow the strat consistently; I've had a few times where I was tempted to go long or short mid-day only to get the options much cheaper near the end of day (because of decay). -_-