Apple Earnings play

You can easily buy it for your fair value. Like I said I am not really an AAPL vol seller and not likely anyone but retail paying 15 cents above perceived fair value for it.

If you buy the fly you're buying the wings and selling the meat, net short vega.
 
Quote from esu2:

fly..
can you elaborate ?
sell 140 calls... and then what ?
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I was pricing the May 140/160/180 call fly, but you could sell the May 160 straddle and buy the May 140/180 strangle. The risk on the position is $6.00 on a break of 140 or 180.
 
I got the Jan 09, because as explained I am planning on holding those after earnings and selling premium against them every month.
I got July for the long puts, because these should keep some IV due to events in between.
 
Atticus, what you are proposing, which is buying a stangle/straddle and selling one is pretty much what I am doing in spirit. The only difference is that you are doing everything front month and I am getting Jan and July on the long side.
My question is why would you go front month on your longs when IV is going to drop more than on the farther-out?
 
Quote from Optrader1:

Atticus, what you are proposing, which is buying a stangle/straddle and selling one is pretty much what I am doing in spirit. The only difference is that you are doing everything front month and I am getting Jan and July on the long side.
My question is why would you go front month on your longs when IV is going to drop more than on the farther-out?
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You're really not. You're long vol. These diagonals are simply long time spreads. That difference [vertical vs horizontal] is what causes modality to flip on vega.
 
"You're really not. You're long vol. These diagonals are simply long time spreads. That difference [vertical vs horizontal] is what causes modality to flip on vega."

Ok, you lost me LOL
 
Quote from Optrader1:

"You're really not. You're long vol. These diagonals are simply long time spreads. That difference [vertical vs horizontal] is what causes modality to flip on vega."

Ok, you lost me LOL
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Trading duration flips it from short to long vega.
 
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