Well, my first earnings play of the season was less than stellar             . The good news is that I got out of the short call side of my iron condor today at nearly max profit. The bad news is that I am currently stuck with a breached short put side. While YUM tacked on 4.14% today, thus increasing my changes of being OTM on expiry next Friday to a whopping 14%, I am not hopeful that price will clear the 75 short put strike by that time, making a roll early next week the most likely outcome.

Ordinarily, with a breached side, you're faced with two choices: (1) roll it and proceed to sell the oppositional side against it in order to "keep the dream alive"; or (2) shut her down and move on.

In this particular case, I am going to roll (point in fact I almost always roll to at least mitigate the loss). Post earnings announcement, there was a bit of pressure for the YUM board to consider spinning off its Chinese business, as this was the greatest drag on Q3 earnings . Various figures have been bandied about as to the effect on share price such a spin-off would have, with numbers bandied about in the +100 range, leading me to believe that there might be some speculative bullishness to the upside in YUM in light of this pressure, this, in spite of the fact that the Board/CEO have poo-pahed the idea of a Chinese spin-off ... .

Regardless of which way it goes, however, gotta mitigate the loss ... . Roll for duration; sell the opositional side against (i.e., short call verts) is the mechanical thing to do.
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