AAPL weekly strangle

Quote from SCI new york:

You are not the OP, so you don't know what he was or wasn't betting on, you're assuming that. Binary or not doesn't matter. IV on OTM calls, especially during earnings on apple is always going to impact the trade and should be taken into consideration. And it wasn't a good bet because AH trading means sh#t to options, you can't trade or adjust the option positions so that point is moot. Shooting for the stars trying to lock in the couple of points above 400 when it was there isn't a great strategy either. And none of those calls were trading 80 delta either when the trade was put in. They werent at 400 for an 'eternity' either.
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I don't care what his motivation was. It's a binary play. It's not a bet on implied vol.

You buy a one lot strangle... you short 100 shares in the AH from 400-405... 20-25 netted and a gain of 3-8 points. It traded above his BE all night. I never stated it was 80-delta prior to earnings. I am referring to a position delta in today's session.

You're fubar on all points.
 
Quote from atticus:

I don't care what his motivation was. It's a binary play. It's not a bet on implied vol.

You buy a one lot strangle... you short 100 shares in the AH from 400-405... 20-25 netted and a gain of 3-8 points. It traded above his BE all night. I never stated it was 80-delta prior to earnings. I am referring to a position delta in today's session.

You're fubar on all points.
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I'm glad you don't care about his motivation, but you're not understanding the trade. He put out an OTM strangle bet on earnings, making a directional play looking for a large move. even stated he might sell the put and ride the call, implying he was expecting the calls to be worth more than his premium in today's trading. He never talked about using stock to lock in the trade otherwise he would have been watching it the entire time. and I don't know who apparently taught you that since its a binary play that IV isn't a factor, but they're wrong. That trade might not have been a direct bet on vol, but that doesn't mean its not a big factor.

Point is the trade was not a good bet. Any other "possibilities" don't matter anymore either. You want to have a pissing contest, make it on something that hasn't happened yet.
 
Quote from atticus:

You buy a one lot strangle... you short 100 shares in the AH from 400-405... 20-25 netted and a gain of 3-8 points. It traded above his BE all night. I never stated it was 80-delta prior to earnings. I am referring to a position delta in today's session.

You're fubar on all points.
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Good solution .... But based on hindsight. Should have been posted over here before earnings, the OP posted his idea the day before his trade.

http://www.elitetrader.com/vb/showthread.php?threadid=223730
 
Quote from SCI new york:

I'm glad you don't care about his motivation, but you're not understanding the trade. He put out an OTM strangle bet on earnings, making a directional play looking for a large move. even stated he might sell the put and ride the call, implying he was expecting the calls to be worth more than his premium in today's trading. He never talked about using stock to lock in the trade otherwise he would have been watching it the entire time. and I don't know who apparently taught you that since its a binary play that IV isn't a factor, but they're wrong. That trade might not have been a direct bet on vol, but that doesn't mean its not a big factor.

Point is the trade was not a good bet. Any other "possibilities" don't matter anymore either. You want to have a pissing contest, make it on something that hasn't happened yet.
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No, it's not a factor when you're deep ITM. He wasn't betting on STAT vol, that's the point. The OP is aware he would take a shit if the stock traded to his strikes.

Watching it the entire time? HTF do you know what he's thinking beyond what he's posted? I think you take it up the ass... am I clairvoyant?
 
Quote from atticus:

He wasn't betting on STAT vol, that's the point. The OP is aware he would take a shit if the stock traded to his strikes.

Watching it the entire time? HTF do you know what he's thinking beyond what he's posted?
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For someone who is asking how i know what he's thinking, you sure are making a lot of assumptions on his trade and why he did them.
 
07-19-11 06:03 PM

Just bought this strangle before close:

Long AAPL Jul 22 375 Put
Long AAPL Jul 22 380 Call

Net debit: 16.90

Right now the trade is at breakeven AH post earnings. Would you recommend closing the trade at open or close just the put leg and let the call leg ride into expiration?

Thanks!




He posted at 6pm, asking about a recommendation for the next day. So I am not clairvoyant, I just know how to read and comprehend words. You should try it sometime. Might help you understand options a little better, although those hindsight trading systems I'm sure work very well for you.
 
Quote from turkeyneck:

Just bought this strangle before close:

Long AAPL Jul 22 375 Put
Long AAPL Jul 22 380 Call

Net debit: 16.90

Right now the trade is at breakeven AH post earnings. Would you recommend closing the trade at open or close just the put leg and let the call leg ride into expiration?

Thanks!
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watching the ah trade, there was ample opportunity to scratch or make a few on this. Waiting for the open was pure gambling.

didnt act right after the 1st 5 min post halt

they fugged up GOOG, but the options market had this pretty well pegged.

and if they dont kill earnings , it trades 20 lower.

who is short this rat, and who isnt long already?
 
Quote from SCI new york:

You are not the OP, so you don't know what he was or wasn't betting on, you're assuming that. Binary or not doesn't matter. IV on OTM calls, especially during earnings on apple is always going to impact the trade and should be taken into consideration. And it wasn't a good bet because AH trading means sh#t to options, you can't trade or adjust the option positions so that point is moot. Shooting for the stars trying to lock in the couple of points above 400 when it was there isn't a great strategy either. And none of those calls were trading 80 delta either when the trade was put in. They werent at 400 for an 'eternity' either.
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I'm not looking to get in the middle of the contest ... but I disagree with you. With exp 3 days away and the calls deep ITM, it's a binary play since they'll trade near parity in the AM. IV isn't relevant... other than the questionable buying of it.

Obviously, you can't trade the options after hours so the support/adjustment has to be made with the UL. If I had this position and it was up 25+ pts AH (over 400), I'd lock in some, maybe all of the gain because perverse things happen overnight and I like my sleep :)
 
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