NaughtyPines

... for a 1.81/contract credit. Metrics: Max Profit: $181/contract Max Loss: $319/contract Break Evens: 1443.19/1626.81 Delta/Theta: -.81/1.82 Notes: Been a while since I've done any RUT. Collecting more than one-third the width of the wings with the shorties camped out around the 20 delta strike. Will roll the untested side on approaching worthless intratrade...

... for a .98 credit. Metrics: Max Profit: $98/contract Max Loss: $202/contract Break Evens: 167.02/192.98 Delta/Theta: -3.59/1.24 Notes: Keeping things simple ... . Rotating into broad market in the July cycle and selling premium in the underlying with the highest background implied out of SPY, IWM, QQQ, and DIA. Collecting nearly one-third the width of the...

EARNINGS: HD (33/24) announces earnings on Tuesday before market open; HPQ (68/38), Thursday after market close. Although the rank/implied metrics are less than stellar, pictured here is an HD June 21st 180/185/200/205 iron condor paying 2.13 (1.06 at 50 max), expected move break evens, and delta/theta metrics of -2.22/2.96. Alternative Trades: June 21st...

... for a 1.02/contract credit (the short strangle -- for 3.43). Metrics (Iron Condor): Max Profit: $102/contract Max Loss: $198/contract Break Evens: 272.98/297.02 Delta/Theta: -3.86/1.61 Notes: A late post, as these were opened on Friday -- the iron condor in a smaller account where buying power is limited; the short strangle in an account where that is less...

You put on an FXI 43 short put in the June cycle, betting on a trade deal coming through, and ... oops ... it didn't, and your short put is now deep in the money. What do you do now? Fortunately, there are several paths you can undertake to defend the position and/or reduce the cost basis in any shares you might be assigned either randomly or at expiration. (a)...

I'm personally not doing a ton here with May opex a mere week away and June at 40 days until expiry, which is a smidge short of that 45 day wheel house I like to use for putting on plays. However, there is "stuff" to do if you're so inclined ... . M (71/54) announces earnings on Wednesday before market open, so you'll want to shoot for a fill on whatever you do...

Although there are quite a few earnings announcements up next week, none of them appear particularly attractive from both a volatility metric standpoint as well as a liquidity standpoint. For instance, MYL (78/46), EA (73/50), and ROKU (65/82) all have the right volatility metrics, but when you go to work setups, you're confronted with non-$1 wide strikes, not...

This is a continuation of a directionally neutral premium selling play (See Post Below) which I've rolled out to June and transformed into a bullish assumption premium selling play. Here, I'm looking to work it as a quasi-synthetic covered call, with the in the money short put standing in for my stock, and the short call acting as cover. Naturally, it isn't...

... for a 1.04/contract credit. Metrics: Max Profit: $104/contract Max Loss/Buying Power Effect: $196/contract Break Evens: 76.96/93.04 Delta/Theta: -2.95/1.41 Notes: Back into biotech, collecting one-third the width of the wings. Will look to manage the trade at side approaching worthless (i.e., rolling toward the tested side) with a profit target of 50% max.

Pictured here is an INDA (66/29) short strangle in the June cycle set up around the 25 delta strikes. Paying 1.00 at the mid, it has break evens of 32.00/39.00, a buying power effect of 5.65, and delta/theta metrics of .68/1.98. Unfortunately, it doesn't have the tightest markets, so expect a little price discovery should you want to get a fill. On the...

... for a 1.09/contract credit. Another premium selling play, small, defined in the semicon exchange-traded fund with implied volatility at nearly twice that of the broad market ... . Collecting slightly greater than one-third the width of the wings. Will look to take profit at 50% max. The naked 110/126 short strangle in the June cycle is currently paying...

... for a 1.04/contract credit. With implied volatility fairly low across the board, going small, defined in the exchange-traded fund with the highest background implied volatility on the board (30.9%) to keep powder dry for something sexier to come along ... . Shorts nearest the 25 delta strike, longs nearest the 10 with slightly more than one-third the width...

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...

EARNINGS: NFLX and IBM both announce on Tuesday after market close, so look to put on something in the waning hours of Monday's session if you're going to do a volatility contraction play. Pictured here is a NFLX (42/46) 25/10 iron condor,* with the short option strikes at the 25 delta; the longs at the 10 (as of Friday close). Metrics: $825 max profit; $1675...

... for a 2.57/contract credit (cost basis of 212.43/share). Notes: Here, I'm looking to acquire additional SPY shares, but only at a potential 25% discount from current price. Otherwise, I want to get paid to wait and/or reduce cost basis in the meantime. Because expiries are skip month (March, June, September, December, etc.), will look to roll out for...

... for a 1.13/contract credit. Metrics: Max Loss/Buying Power Effect: Undefined/$270/contract Max Profit: $113 Break Evens: 20.87/33.13 Delta: -4.36 Theta: 3.28 Notes: Earnings in 22, so not looking to stay in this trade for long. High implied at 66 with excellent options liquidity ... .

Trade of the Week (May Cycle): Pictured here is an EWZ (29/34) May 17th 37/45 short strangle: 1.14 credit, .57 at 50% max, break evens at 35.86/46.14, delta -1.46, theta 2.87. Obvious Alternatives: EWZ May 17th 41 short straddle, 3.91 credit, .98 at 25% max, break evens at 37.09/44.91, delta -4.6, theta 4.01. Notes: Pros: High implied, high implied relative to...

... for a 1.10/contract credit. Metrics: Max Loss/Buying Power Effect: Full notional Max Profit: $110/contract Break Even on Setup: 123.90 (18.4% discount over where the underlying is currently trading if assigned) Delta: 10.93 (Current) Theta: 1.36 (Current) Notes: While I'm sitting on my hands a bit here, I figured I post one of my kid's "Not A Penny More"...