Apple Earnings play

[stock_trad3r]

the more hedging you place on an options strategy the less upside there is. Either go hard or go home.

 

[atticus]

Quote from stock_trad3r:

the more hedging you place on an options strategy the less upside there is. Either go hard or go home.

My 4-year old has better analytical skills.

 

[El OchoCinco]

Quote from stock_trad3r:

Either go hard or go home.

Well you got the best of both worlds cause you often go home hard alone. I bet you got forearms like Popeye...

 

[atticus]

Quote from optioncoach:

Well you got the best of both worlds cause you often go home hard alone a lot. I bet you got forearms like Popeye...

:bow:

 

[NamZ]

Quote from atticus:

Earnings-bets are generally a waste of time unless you've spotted a vertical skew that is exploitable. Unfortunately, it will still involve shorting gamma.

What is a vertical skew?

 

[atticus]

Sold the AAPL Jan09 160 straddle at 51.40.

 

[Optrader1]

Atticus, why the Jan 09? What about selling a ratioed one if someone is more bullish? (Like sell 10 puts and 8 calls)

 

[atticus]

Quote from Optrader1:

Atticus, why the Jan 09? What about selling a ratioed one if someone is more bullish? (Like sell 10 puts and 8 calls)

More vega, less gamma. OptionCoach mentioned it this morning in chat. Sure, ratio it if you like.

 

[Optrader1]

It does look like a very high probability trade. Do you predict a 10% drop in IV on those?

 

[Optrader1]

I understand the lower Gamma, but how can we have higher Vega when we agreed earlier that the IV on the front month will drop more?