NaughtyPines

EARNINGS PLAY: ANF NOV 25TH 14.5 SHORT PUT

Long
NYSE:ANF   ABERCROMBIE & FITCH CO
Putting this on a touch early ... . High implied volatility rank/high implied volatility in advance of earnings . I'm looking for a volatility crush after earnings announcement and, of course, bullish or sideways movement ... .

Metrics:

Probability of Profit: 74%
Max Profit: $48/contract
Max Loss/Buying Power Effect: $1402 (assuming the stock goes to 0, and you do nothing); buying power effect is broker dependent)
Break Even: 14.02

Notes: I'll watch this closely. If I get bullish movement plus an ensuing volatility collapse, I'll look to take it off near worthless. Alternatively, if it breaks the short put, I'll roll it out for additional credit, as I'm not particularly interested in owning the stock.
Trade closed manually: Covered shortly after open for a .21 db. The stock lost ground from where I entered by some measure, but I got a nice assist from the implied volatility collapse. Net profit: $25/contract, after fees/comms.

Comments

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