... for a 2.10/contract credit. Notes: Earnings announcement volatility contraction play with 30-day at 102.7%. Adjusted my strikes slightly over my "Trade Idea" post. Defined Risk Alternatives: September 18th 20/25/45/50 iron condor, paying 1.20. I'd prefer getting one-third the width out of that, but -- as with LYFT -- pesky width on strike availability in...
... for a 1.38/contract credit. Notes: High 30-day implied at 81.2% with earnings to be announced shortly. Defined Risk Alternatives: September 18th 20/27.5/35/42.5, paying 2.23 with break evens wide of the expected move. Setting up an iron condor out in September is a bit pesky, since you still have 2.5 wides to deal with.
... for a 3.55 credit. Notes: Doing something a little more "programmatic" in the IRA by selling the 1 standard deviation/16 delta short put in the expiry nearest 45 days until expiry. Will take profit on approaching worthless or take assignment and sell calls against at the strike nearest the break even. This is naturally buying power heavy, but you can...
Metrics: Rank/Implied: 9/96 Short Straddle Price/Stock Price Ratio: .257/25.7% Max Profit: 1.70 ($170)/contract; .85 ($85) profit at 50% max Max Loss: Undefined Break Evens: 23.30 on the put side (2 times the expected); 51.70 on the call (>2 times the expected) Delta/Theta: -1.67/5.90 Defined Risk Alternatives: September 18th 20/25/50/55 iron condor, paying...
EARNINGS: LYFT (20/82/19.8%) announces earnings on Wednesday after the close, so look to put on a play in the waning hours of Wednesday's New York session if you want to play the volatility contraction. Pictured here is a directionally neutral 29/38 short strangle camped out at the 20 delta in the September monthly. Paying 1.26 as of Friday close, it has...
... for a 7.71 credit. Notes: Earnings, high implied. There is some call side skew here that I occasionally try to accommodate in some fashion, but just went plain Jane delta neutral at around the 17 delta. Defined Risk Alternatives: September 18th 130/140/215/225, paying 3.63 at the mid as of the writing of this post, delta/theta 2.98/4.49. September 18th...
... for a 2.55/contract debit. Metrics: Max Loss on Fill: $255 Max Profit on Fill/ROC% at Max: $45 (17.6% at Max) Break Even: 6.55 Debit Paid to Spread Width Ratio: 85% Delta/Theta: 47.07/.53 Notes: A small, bullish assumption trade in Ford in one of my favorite synthetic covered call setups. The debit paid to spread width ratio isn't what I generally like to...
... for a 4.18 credit. Notes: Defined in the smaller, naked in the bigger. Defined risk alternatives: September 18th 105/115/180/190 iron condor, paying 3.51 (i.e., > 1/3rd the width of the wings) at the mid price as of the writing of this post. Some price discovery may be required on the four-legged, as it's bid 3.16/mid 3.51/ask 3.91, which isn't the...
... for a 1.08/contract credit. Notes: High rank/implied at 57/71. Selling the 19's ... . Will look to take profit at 50% max, manage on side approaching worthless or break even test.
... for a 2.74/contract credit. Notes: Earnings announcement volatility contraction play with 30-day implied at 70.9%. Will look to take profit and/or manage on side approaching worthless/break even test ... . For those wanting to play naked, the August 21st 150/205 short strangle was paying 7.03 as of the writing of this post.
EARNINGS: There's a bunch, but here are the ones that interest me most for volatility contraction plays: BYND (46/87/17.2%)*, announcing Tuesday after market close. ROKU (40/84/16.6%), announcing Wednesday after market close. SQ (40/74/13.4%), announcing Wednesday after market close. ETSY (38/74/14.8%), announcing Wednesday after market close. UBER...
... for a 2.90/contract credit. Notes: Earnings play with high 30-day implied at 65.9%. Will look to take profit at 50% max or manage on side approaching worthless/side test ... .
I frequently talk about "rolling" options out in time to extend duration, reduce cost basis, improve setup break evens, and increase profit potential, but if my review of recent postings on some options forums is any indication, I've basically taken it for granted that all options trading platforms have this built in as a "one step" process. Well, lo and behold,...
EARNINGS: -- PROBABLY PLAYING: AMD (38/71/15.4%) announces on Tuesday after market close. BA (25/71/15.1%) announces Wednesday before market open. Pictured here is an AMD August 21st delta neutral 60/85 short strangle paying 2.93 as of Friday close. The BA August 21st 150/210 was paying 7.23 at the mid. Naturally, strikes may need adjustment running into...
... for a 3.45 credit. Notes: Sold the strike nearest the 16 delta. Meant to do this earlier in the week, but probably got distracted by a few earnings plays. Cost basis of 291.55 if assigned. Basically, looking to do this programmatically every week in the expiry nearest 45 days 'til expiry and then run it to expiry, at which time these will either (a)...
... for a 1.74/contract credit. Notes: High rank/implied with earnings in 1. Looking to take profit at 50% or otherwise manage on side approaching worthless. Defined Risk Alternatives: The August 21st 26/31/45/50 iron condor, paying .98. Generally, I like to get one-third the width of the widest wing out of these, but the call side is pesky with strike...
... for a 1.26/contract credit. Notes: High rank/implied running into earnings. Looking to take profit at 50% max or otherwise manage on side approaching worthless or side test ... . Defined Risk Alternatives: August 21st 17/25/25/33 iron fly, paying 4.00 (1.00 at 25% max) (a "stays within expected move" play) or an 18/21/28/31 iron condor, paying 1.05 (.52 at...
... for a 2.17 credit. Notes: Relatively high rank/implied for an exchange-traded fund at 40/38. This isn't quite a Big Jade Lizard, which usually consists of an at-the-money short straddle with a long call, but it's trading between the strikes, so opened it up to a skinny at 32/33. No upside risk, since the total credit receives exceeds the width of the short...