TWTR (41/54) announces earnings on Tuesday before market open; pictured here is a May 17th 30/39 short strangle.
Metrics:
Max Loss/Buying Power Effect: Undefined/3.50/contract
Max Profit: 1.09
Break Evens: 28.91/40.09
Delta/Theta: -3.99/4.92
Front Week to May Opex Volatility Differential: 41.5%
Notes: Look to put a play on in the waning hours of the Monday session, adjusting the strikes to reflect any movement in the underlying if necessary.
For those of a defined risk bent, the May 17th 27/31/38/42 iron condor is paying 1.13 with a buying power effect of 2.87, break evens of 29.87/39.13, and delta/theta of -1.24/2.9. It isn't quite what I like to see out of these (one-third the width of the widest wing in credit). By going slightly wider, you give up some credit at the door while increasing probability of profit.
On the exchange-traded fund front, not much is rocking. Moreover, we're still in between cycles for me, with May opex being too short in duration and June being a touch long. As with last week, I'm looking to put something on in EWZ (14/30), since I don't have anything on at the moment, but have really just been waiting for June to get closer in time: the June 21st 36/44.5 short strangle is paying 1.23 with a buying power effect of about 4.10/contract, break evens at 34.77/45.73, and delta/theta metrics of -2.1/2.35. It's a little wider than I usually like to go (~25 deltas), but if I'm going to but it on early in the cycle, I want a little more room to adjust if necessary.
The standard 25/10 iron condor in the June cycle is the 34/37/44/47, which is paying 1.02 with a buying power effect of 1.98, break evens of 35.98/45.02, and delta/theta of -2.05/1.07.
Metrics:
Max Loss/Buying Power Effect: Undefined/3.50/contract
Max Profit: 1.09
Break Evens: 28.91/40.09
Delta/Theta: -3.99/4.92
Front Week to May Opex Volatility Differential: 41.5%
Notes: Look to put a play on in the waning hours of the Monday session, adjusting the strikes to reflect any movement in the underlying if necessary.
For those of a defined risk bent, the May 17th 27/31/38/42 iron condor is paying 1.13 with a buying power effect of 2.87, break evens of 29.87/39.13, and delta/theta of -1.24/2.9. It isn't quite what I like to see out of these (one-third the width of the widest wing in credit). By going slightly wider, you give up some credit at the door while increasing probability of profit.
On the exchange-traded fund front, not much is rocking. Moreover, we're still in between cycles for me, with May opex being too short in duration and June being a touch long. As with last week, I'm looking to put something on in EWZ (14/30), since I don't have anything on at the moment, but have really just been waiting for June to get closer in time: the June 21st 36/44.5 short strangle is paying 1.23 with a buying power effect of about 4.10/contract, break evens at 34.77/45.73, and delta/theta metrics of -2.1/2.35. It's a little wider than I usually like to go (~25 deltas), but if I'm going to but it on early in the cycle, I want a little more room to adjust if necessary.
The standard 25/10 iron condor in the June cycle is the 34/37/44/47, which is paying 1.02 with a buying power effect of 1.98, break evens of 35.98/45.02, and delta/theta of -2.05/1.07.