NASDAQ:ULTA   ULTA SALON COSMETCS & FRAG INC
a year ago
I generally don't like to trade underlyings that don't offer weeklies, particularly when the price is this "big" (>$150), because I may end up being in the trade longer than I'd like. The idea, after all, with earnings plays is to get out at 50% max profit as soon as practicable and then redeploy the capital elsewhere. In this particular case, you only have monthlies to work with, but the Dec 18 expiration is close enough in time for me to green light it.

For me, I'm kind of on the fence as to whether go short strangle or iron condor. This is why:

Dec 18 145/185 short strangle
POP%: 78%
Max Profit: $170/contract
BPE: ~$1650
BE's: 143.30/186.70

versus

Dec 18 135/145/185/190 iron condor
POP%: 77%
Max Profit: $125/contract
BPE: ~$875
BE's: 143.75/186.25

As you can see, the short strangle eats up quite a bit of buying power as compared to the iron condor. On the other hand, the IC             has lower profit potential and is a bit more cumbersome to manage in the event a roll is required. Since I've got the BP             available (and then some), I'm going to go with the short strangle, but go a little wider than usual so that I don't get caught with another problem setup going into "earnings break." I'm probably being overly cautious here, because as you can see from past earnings, ULTA             just doesn't move much in response to earnings ... .

The other reason I'm willing to devote the BP             here is that we don't have many earnings plays left on the calendar and some of my longer-term setups that were intended to bridge the gap between this earnings season and the next are getting fairly close to 50% max profit, at which time I will take them off ... .
a year ago
Comment: So, the rolled out setup was a Jan 15 160/170/185/195 iron condor. Price has been dancing above and below that 185 short call strike for it seems like eons. In any event, with 24 DTE, I figured I'd delta balance a little bit here by rolling the short put side up to 165/175 for an additional .40 credit.
11 months ago
Comment: Sooooo close to being able to take this thing off for scratch. Price has been literally dancing at +/- .50 around that 185 strike. Fingers crossed, I'll be able to cover it for scratch on Monday ... . Hey, not everything works out from the get-go, but if you can get it back to scratch with one roll, I consider that a gift ... .
11 months ago
Comment: I finally covered this setup today; here's the history: the original setup was a 145/185 short strangle that I received a 1.58 credit for; on Dec 7th, I covered the short put side of the setup for a .10 debit and bought a little protection on the call side (a 195 long call for a .30 debit), after which I rolled out the 185/195 short call spread to the Jan 15th expiration for a .93 credit, matching it up with a Jan 15th 160/170 short put spread for a .83 credit. I eventually rolled up the short put side a bit to a 165/175 short put spread (same expiry) for an additional .40 credit. So, I received 1.58+.93+.83+40 = 3.74 in credits. I covered today for a 2.95 debit, which when added to the other debits (.10 + .30) = 3.35. So I made 3.74-2.95=.79 or $79/contract, which is about what I would have made were the short strangle to have gone well from the get-go. All's well that end's well ... .
11 months ago
Comment: My math is off -- 3.74+3.35=.39 or $39 per contract. Ain't great, but beats managing a loser for eons.
11 months ago
Comment: ... and I can't type ... . 3.74-3.35=.39.
NaughtyPines
a year ago
Short strangle filled at 1.58 ... .
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NaughtyPines
a year ago
Took off the short put side today for a .10 debit, but I'm buying myself some protection against an assignment -- a 195 long call for .30 debit. This will create a short call vertical worth .35, which I will take off for scratch before expiration if I get a chance to.
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NaughtyPines
a year ago
Okay, okay, okay ... . The trade is making me nervous, so I'm rolling the short call vertical out to the Jan 19th expiry for a credit while I can. I got .93 to roll the short call side out and matched it up with a short put side for which I received a , so now I've got a Jan 15 160/170/185/195 iron condor worth 4.87 in credit ... .
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NaughtyPines
11 months ago
I finally covered this setup today; here's the history: the original setup was a 145/185 short strangle that I received a 1.58 credit for; on Dec 7th, I covered the short put side of the setup for a .10 debit and bought a little protection on the call side (a 195 long call for a .30 debit), after which I rolled out the 185/195 short call spread to the Jan 15th expiration for a .93 credit, matching it up with a Jan 15th 160/170 short put spread for a .83 credit. I eventually rolled up the short put side a bit to a 165/175 short put spread (same expiry) for an additional .40 credit. So, I received 1.58+.93+.83+40 = 3.74 in credits. I covered today for a 2.95 debit, which when added to the other debits (.10 + .30) = 3.35. So I made 3.74-2.95=.79 or $79/contract, which is about what I would have made were the short strangle to have gone well from the get-go. All's well that end's well ... .
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