NaughtyPines

WSM -- POST-EARNINGS PREMIUM SELLING PLAY

NYSE:WSM   WILLIAMS-SONOMA INC (DE)
As with the FL             play, IVR/IV in WSM             remains high post-earnings. Similarly, this is one of those issues that doesn't offer weeklies, so I'll have to go farther out in time than usual to find good strikes.

Here's the play:

WSM             Jan 15 55/72.5 short strangle for a 1.05 credit
POP%: 76%
Max Profit: $105
BPE: ~$656
BE's: 53.95/73.55

With both this and the FL             play, I will look to get a fill for at least 1.00 credit, but will not chase price a great deal to get it. By and large, I don't like to play underlyings that do not have weekly expiries, since this allows less flexibility in rolling and generally indicates less liquidity in the options, but I have quite a bit of buying power sitting on the sidelines here and with earnings plays waning, I want to keep some of it in play.
Volatility quickly contracted on this one, such that I couldn't get filled on something for more than 1.00 ... .
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