NaughtyPines

BOUGHT LULU APRIL 8TH 54 SHORT PUT TO CLOSE

NASDAQ:LULU   LULULEMON ATHLETICA INC
With the short put nearing worthless here, I'm closing it out for a .05 debit ($5). I received a .68 credit for the 54 short put ($68), so I realized a profit of .68 - .05 = .63 ($63)/contract on that side.

Unfortunately, price is getting uncomfortably close to my short call side ... .
Missing important information here. When exactly did you sell the strangle, what was LULU at?
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baerrus baerrus
Ok I see from the several posts. It appears you opened before earnings Mar 30?
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Yep. The day immediately before.
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baerrus NaughtyPines
Did you think the straddle was overpriced?
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If I understand your question correctly ... . I ordinarily do not do short straddles (short put and short call at same strike) except for lower priced underlyings (usually $10 and under) if I can't get sufficient premium out of a strangle.
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baerrus NaughtyPines
Sorry I meant to say a strangle you sold into the Earnings. Did you sell it because it was overpriced?
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Oh, sorry. My criteria for selling are that the underlying's implied volatility ranks above the 70th percentile for the past 52 weeks and that current volatility exceeds 50%, so in that sense, the setup is priced higher than usual due to greater implied volatility.
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