Playing TWTR earnings for volatility contraction here ... .
The metrics:
Probability of Profit: 47% Max Profit: 217/contract Max Loss/Buying Power Effect: 183/contract Break Evens: 15.83/20.17
Notes: As with a short straddle, I'll look to manage this at 25% max profit. I'm putting this on a touch early so that I don't space it out at the last moment. My ordinary go-to strategy for earnings/vol contraction plays are either a short strangle or an iron condor, but I just couldn't get the credit I wanted out of those setups with this underlying, so went with an iron fly instead.
Trade closed manually
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Closing here for a 1.71/contract credit; $41 net profit/contract after fees/commissions. I would note that I had a heck of a time closing the entire fly as a unit, so I opted to close the short straddle portion of the setup first and then the long options separately.
I had a bearish BWB on TWTR Nov18 puts 18/16/13. Marking to a decent profit. Will wait for 1-2 days to get another 10% IV defaltion
NaughtyPines
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Awesome. My basic notion was "I want to get the hell out of this thing" with all the rumors, the change in earnings announcement time, layoffs ... . Made me "itchy." Lol.