TRADE IDEA: HOG SEPT 16TH 42.5/57.5 SHORT STRANGLE
Ain't much decent premium out there ... . HOG announces in 2 days, but I'm really just doing this as a longer-term premium selling play (hence, the Sept expiry), since there isn't jack diddly in the market of late.
Metrics:
Probability of Profit: 72%
Max Profit: 1.38/contract ($138)
Max Loss/Buying Power Effect: Undefined/$501
Break Evens: 41.12/58.88
Notes: Filled for a 1.38 almost immediately. You can naturally go in closer in time (Aug expiry) to take advantage of the vol crush post earnings, but you'll have to tweak the short option strikes to get them in toward the 85% probability out-of-the-money strikes for the Aug 19th expiry. It's tough to get them right at 85% or thereabouts, which is another reason why I went out farther in time ... .
Metrics:
Probability of Profit: 72%
Max Profit: 1.38/contract ($138)
Max Loss/Buying Power Effect: Undefined/$501
Break Evens: 41.12/58.88
Notes: Filled for a 1.38 almost immediately. You can naturally go in closer in time (Aug expiry) to take advantage of the vol crush post earnings, but you'll have to tweak the short option strikes to get them in toward the 85% probability out-of-the-money strikes for the Aug 19th expiry. It's tough to get them right at 85% or thereabouts, which is another reason why I went out farther in time ... .
Trade closed manually:
Covered today for a .98 ($98)/contract debit. In for a 1.38 credit; out for a .98 debit; $36.94 net profit after fees commissions. When the market gives you 30% of max profit in a couple of days, I say money, take, run ... .