OPENING: CRON OCT 19TH 10 MONIED COVERED CALL
... for a 9.26/contract debit.
Max Profit: $74/contract
Max Loss: $926/contract
Break Even/Cost Basis: 9.26/share
Theta: 1.67
Delta: 23.56
Notes: Going directly to a monied covered call in this high implied volatility underlying (121%) with a mildly bullish delta metric. Now that I look at it, the 10 short put (25.78 delta) in October has a better max (1.03) with similar delta metrics should you want to go that route.
Max Profit: $74/contract
Max Loss: $926/contract
Break Even/Cost Basis: 9.26/share
Theta: 1.67
Delta: 23.56
Notes: Going directly to a monied covered call in this high implied volatility underlying (121%) with a mildly bullish delta metric. Now that I look at it, the 10 short put (25.78 delta) in October has a better max (1.03) with similar delta metrics should you want to go that route.
Trade active:
Rolling the Oct 10 short calls out at 50% max to Jan for a .90/contract credit; scratch at 8.36/contract ... .
Trade active:
Just a side note: I have a GTC order in to pull this off for a 9.05/contract debit, which is my original profit target of around .69 (8.36 + .69 = 9.05). I may then proceed to "wheel" the underlying (i.e., sell short puts/acquire-expire worthless/cover if assigned), since IV is still high here.
Trade active:
With price closing in on my short call, I may consider rolling out again to capture maximum extrinsic, even though it will substantially extend duration of the setup (I'd have to roll from Jan to April). That being said, the mid price to roll the Jan to April is .83, which would not be an insubstantial cost basis reduction. Unfortunately, markets are showing wide in the off hours, so I'll just have to check the sexiness of that when markets open.
Trade active:
Turning this into a long-term play and capturing (nearly) maximum extrinsic ATM (spot's at 9.99) by rolling from Jan to April for a .65/contract credit. Cost basis at 7.71/share. Now I've just got to sit on it ... .
Trade active:
Late Post: Rolled out the 10 short call to July for a .38/contract credit on buyout rumors. Cost basis at 7.33. If the buyout doesn't materialize, it'll probably drop back below 10. If it does happen, the stock will gravitate toward the buyout price (currently unknown) and then basically "die there." Regardless of what happens, I'm looking at a max profit of 1.67/contract if it stays above $10 or is bought out at $10 or better.