I was wondering if anyone who has some experience trading options could tell me whether buying a naked call and a naked put on the same underlying at roughly the same strike price would be a good way to capitalize on volatility in the underlying? For example:
Suppose security X is trading at $20, call with strike at 21 costs $0.5 and put at 19 costs $0.5. If I buy a call and put then price movements between 18 and 21 should come close to a wash and movements either above or below these numbers should lead to profits (assuming the time value doesn't decrease too dramatically).