I am already long PXD and trying to work back to black. Using the volatility around earnings to try to collect some premium without choosing a direction. I sold the 165/130 strangle in December with 43 days for a 2.10 credit. The strangle is covered but will manage this as a stand alone trade. Which means closing for 25% profit target and rolling the untested side with a 2X loss to close. Since the stock has dropped on earnings but oil is still near the top of the range, I would like this to just sit there and do nothing or drift up (since the put carries greater value and carries most of the risk)
Comment:
Closed the 130 put for .31 cents today. Looks like a lot of supply around 165 and with 38 days left will wait for some downside movement and around the 21 day mark to sell another put again. Since this was a covered strangle I have little to no anxiety over the price rocketing just after I entered the trade and will look to roll out and up in time and add puts in the next cycle. Will look to sell whatever is the 15-20 delta. I am currently on a self imposed suspension from trading in my reg-t but this is considered managing an open position..........
Comment:
Trade closed. Bought the 165 call back for 1.10 today for a little better than the 25% target (.69 minus fees should be about .52) Was tempted to let this run and get some more out of the call but better to stick to the trade rules....especially when I was surprised by the strong initial up move.
Comment:
Opening a January strangle with 51 d.t.e. and I.V.R. of 33% (sorry put periods to avoid some ticker being pulled) Sold the 160 call for 2.65 and ratio'd the put side with 135/140 strikes as I am thinking the risk is on the downside for oil but still removing direction somewhat. About 3.00 in premium collected which will give a breakeven of 127 to the downside and 163 on the upside....but if it did run up again I would most likely roll out in time or possibly add shares before being called away to continue working the position. I have only tried that once (AMD DNCS) and it did not work out favorably....just managing the position without emotion but still trying to take advantage of time passage (theta) to become a better trader.
Comment:
Trade active: Still rolling my 160 short call in PXD until my breakeven is reached. Just rolled to July for a measly 1.00 but still far better than just owning stock. Not adding any puts or put ratios with this one unless it gets back closer to my short strike and builds some volatilty that would make it worthwhile to trade.