One of the few earnings
plays this season that meets my >70 implied volatility
rank, >50 implied volatility
criteria -- GPS
. It announces on Thursday after market hours, but I won't have time to fiddle with it then, so I'm shooting for a fill here. I looked at both an iron condor and a short strangle, but those didn't have enough juice in them to make them worthwhile given the price of the underlying. I'm also going farther out than usual for an earnings
play, as I generally like to give straddles greater leeway to work themselves out with time (although I'm naturally hoping we get beaucoup volatility
contraction post-earnings such that I can take it off fairly immediately).
Probability of Profit: 56%
Max Profit: $208/contract
Max Loss/Buying Power Effect: Undefined/~$350
Break Evens: 15.42/19.58
Notes: A short straddle is a short call and short put at the same strike ... . Unlike a strangle, I'll look to manage this at 25% max profit because the "profit zone" is somewhat narrower as compared to an iron condor or short strangle ... .