Apple Earnings play

O

Optrader1

What do you think of this play?

- Sell 10 May 185’s
- Sell 10 May $140’s puts
- Buy 12 Jan 09 200’s
- Buy 10 Jul 150 puts.

Profitable between 135 and 208 at may expiration. Max profit at 185. Takes advantage of IV crush.

Thanks
 
Thanks. Yes, that's what I mean and pretty much what I got in my simulation as well. Seems pretty good to me as $138-$200 is a pretty good range.
 
Well, in essence, it seems okay, but that is a pretty high margin requirement ($40,000) to just make that small amount of money, although the range is pretty wide enough (although you never know).
 
At expiration, between $150 and $190, profits vary between $4,000 and $9,000. That seems pretty decent on a $40,000 investment, no?
 
Glad to pass it on. It is called OptionsOracle and is a freeware program from SamoaSky.

Although it doesn't have the backtesting tools that OptionVue has (I wouldn't use it anyway), it is equal to the performance with saving the $1,000+ price tag of OptionVue.

http://samoasky.com/

(Also note: The example I gave has Interactive Broker commissions imbedded in, which is why you might get a difference decimal difference than what you came up with.)
 
Thanks for the speedy reply.

I just dpwnloaded it and it looks superb.

I will play around with it but really looks pretty much what i have been looking for at a great price!!!!

Really appreciate it.
 
Quote from Optrader1:

At expiration, between $150 and $190, profits vary between $4,000 and $9,000. That seems pretty decent on a $40,000 investment, no?
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Jan vol will drop 300 to 500 bp. You're modeling flat vols. You are long vega, a lot of vega. My guess is that the position will be marked to a loss when it begins trading after the report.

Short gamma, long vega. I realize it's tempting to sell the duration-skew, but it's likely a better entry after the report.
 
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