NaughtyPines

GMCR -- ANOTHER WEDNESDAY EARNINGS PLAY

NASDAQ:GMCR   None
GMCR's been getting hammered since its last two earnings announcements, and with earnings being announced tomorrow after market close, look to put a play on before the closing NY bell sounds.

In any event, here's the setup I'm looking for a fill on tomorrow:

GMCR Nov 27 31/49.5 short strangle
POP%: 75%
Max Profit: $185/contract
Buying Power Effect: ~$402/contract
BE's: 29.15/51.35

As with all short strangles earnings plays, I look to get in and out quickly, taking these off if they hit 50% max profit, and then redeploying the buying power elsewhere.

Comments

Closed the put side out for .05; the call side went for 50% max toward the end of the day (had me worried there for a bit).
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After earnings, the put side is worth less than .05, so I'll look to close that out tomorrow. With the call side, I'll look to take that off at 50% max, but will keep an eye on it, since it tested the call side today before retreating.
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Unfortunately, volatility ebbed during the day, so I couldn't get in at 1.85; settled for 1.30.
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