ROKU options are selling at a very high premium (time value) due to very high IV%. To take advantage of the high premium I opened an Iron Condor. I chose an iron condor because I don't have a strong bias (bull/bear). This strategy provides a little more cushion whether it moves one direction or the other. I would have chosen a credit spread strategy if I did have a strong bias.
3 Days till expiration. 56/66 Calls & 45/35 Puts. Premium $3.58 per spread.
ROKU price at order execution $50.02
Break even $59.58 & 41.42
GREEKS
D G T V
Net Spread: .0034 .0400 -.0514 .0048
IV% on each contract is between 219% - 260% (versus 61%)
3 Days till expiration. 56/66 Calls & 45/35 Puts. Premium $3.58 per spread.
ROKU price at order execution $50.02
Break even $59.58 & 41.42
GREEKS
D G T V
Net Spread: .0034 .0400 -.0514 .0048
IV% on each contract is between 219% - 260% (versus 61%)
Trade active:
Earnings and forecast occurred. Earnings good, forecast disappointed. Stocked fell. However, as expected, IV% dropped by 150%. Even with big price drop, trade is still working out in my favor.
To be safe and remove risk on the books, I am attempting to close the trade early. No one would pass on a $1.50-1.70 credit per option spread for a 1 day trade. That is a great trade. If I wait the 3 days, I could keep the $3.58 received OR potential loss money.
To be safe and remove risk on the books, I am attempting to close the trade early. No one would pass on a $1.50-1.70 credit per option spread for a 1 day trade. That is a great trade. If I wait the 3 days, I could keep the $3.58 received OR potential loss money.
Trade closed manually:
Closed positions for a $1.90 debit. 3.58 - 1.90 = 1.68 ($168/per contract) gain in less than 24 hours.