NaughtyPines

AET -- POST-EARNINGS PREMIUM SELLING PLAY

NYSE:AET   None
When I see a possible good idea on someone else's web site, I steal it, and it becomes mine -- all mine (mwuah hah hah). This particular one comes courtesy of TastyTrade. After having just announced earnings , AET still enjoys a fairly high IVR /high IV (78/39). With buying power to spare in this otherwise fairly low volatility environment, I'm going to play via short strangle:

Dec 24 90/123 short strangle
POP%: 80%
Max Profit: $214/contract
Buying Power Effect: ~ $1073
BE's: 87.86/125.14

As usual, I'll look to take the trade off at 50% max and redeploy the capital elsewhere. I would note that AET doesn't have the most liquid of options, so it might be worthwhile to do a little "price discovery" around the mid price to see if you can't get a fill for a couple pennies more or if you have to settle with getting one for a couple pennies less (in my experience, it's usually the latter).

Comments

Out of the Dec 24 90/114 for 50% max.
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Rolled the call side down to the 114 strike for an additional .77 credit (same expiry), so now it's a Dec 24 90/114 short strangle.
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