NaughtyPines

FB -- EARNINGS PLAY

NASDAQ:FB   FACEBOOK INC
Okay, okay, okay ... . So FB             doesn't meet my ordinary criteria of having high IVR             (70+) and high IV (50+) for purposes of selling premium (currently its IVR/IV is 46/36). My excuse is, "Hey, it's Facebook             ; you can't not play Facebook" (plus the typical 1 SD             short strangle yields $145 per contract and the options, unlike some of my plays, are extremely liquid, with >.05 between the bid and the ask).

Here's what I'll probably go with, although some tweaking might be in order as we move through the trading day:

Nov 17th 92.5/112 Short Strangle
POP%: 73%
Max Profit: $145/contract
BPE: Undefined
BE's: 91.05/113.45

Notes: I'm going with the Nov 17th expiry, because the options are slightly more liquid there, insuring a greater likelihood of a fill at a "fair price." I could see skewing this a bit bearish , seeing as we're at all time highs; we'll just see how things go throughout the trading day and adjust the strikes accordingly. I'll look to take this off at 50% max profit.

Should you wish to opt for an iron condor, use the above short strikes, along with longs 2-4 strikes out from those (e.g., 89.5/92.5/112/115 iron condor).
Filled for 1.44 ... .
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