Description: Earnings after close, taking advantage of high IV on same week options and covering with next week's (Calendar Spread).
Long Call Calendar Spread Levels on Chart R/R ~4:1 Positive R/R, stop loss levels built into position. Conveniently, Break-evens:
158.99, (2 stdev from open)
146.33, (~80% of 1 stdev from open)
Intend to close before near term expiration. *Stops based off underlying stock price, not mark to market loss
The Trade BUY 11/05 152.5C SELL 10/29 152.5C
Position Addition: Will be running a limited amount of capital in additional same week OTM long calls to position for additional upside. These will be purchased at EOD. My Position: BUY 10/29 160C
*The amount I am buying of the OTM calls here is equivalent to ~15% of total position size. Estimated Position Delta: .09
As you can see, my long long bias is negligible to the overall strategy. I will update with my fill and delta when I open the additional long calls.
Trade active
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Calendar Spread filled at .56. There was a brief point where it could have been filled at .35, for a 7:1 R/R and more attractive break-evens.
Trade active
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Filled the 10/29 160Cs at .21. Total position delta is .2101 at close. Investors did not like the earnings, but fortunately AAPL settled > 147, above our lower breakeven point for the calendar spread. As for the 160C portion, it will just be closed out at a loss.
Trade closed: stop reached
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Closed calendars for .42, -24%. Long calls will most likely have to expire worthless.