Now that I'm out of my P 12/12 short straddle for a small profit, I'm almost immediately looking at it again, since it popped up on my screener based on its high IVR (currently 74, 104 for its IV).
Most of the time, I want to get at least a 1.00 credit ($100 max profit) out of my short strangles, since the vast majority of the time I take them off at 50% max (i.e., I'm looking to make $50/contract on most of my plays).
In this particular case, if I go out to the 1 SD, I won't quite get a $1.00, but if I squeeze the strikes in just a touch, I can eek out that.
So here's the play:
Jan 22 8.5/16 short strangle
POP%: 69%
Max Profit: $102/contract
BPE: ~ (Undefined/Off Hours)
BE's: 7.48/17.02
Generally, I don't like to force these much below 70% POP, but when it's this close, and the underlying's this cheap, I'm willing to take a small risk to deviate from my ordinary setup. Naturally, this may all change by Monday .... .
Most of the time, I want to get at least a 1.00 credit ($100 max profit) out of my short strangles, since the vast majority of the time I take them off at 50% max (i.e., I'm looking to make $50/contract on most of my plays).
In this particular case, if I go out to the 1 SD, I won't quite get a $1.00, but if I squeeze the strikes in just a touch, I can eek out that.
So here's the play:
Jan 22 8.5/16 short strangle
POP%: 69%
Max Profit: $102/contract
BPE: ~ (Undefined/Off Hours)
BE's: 7.48/17.02
Generally, I don't like to force these much below 70% POP, but when it's this close, and the underlying's this cheap, I'm willing to take a small risk to deviate from my ordinary setup. Naturally, this may all change by Monday .... .
Comment:
Out of the trade on Friday for 50% max ... . I'll gladly take that on a slightly tighter than usual setup.