BIDU earnings

[gangof4]

Quote from scriabinop23:

Your numbers aren't correct.

first there will be an IV collapse.

next remember that if I get a 10 pt move, yes the straddle will be slightly underwater (remember I sold it at 9.70, so it almost entirely accomodates that move in either direction towards the hedge) ... but the hedge (at 105, for example) will be worth a bit more.

My dream would be an open at 80 tommorow, to close out the calls. Then wait til Fri for a recovery to 115 or above (for the puts).
Alternatively an open at 115 will be great.

i'll take your first scenario (to 80)! i looked @ selling an iron butterfly also but, the more i thought about the history of this stock @ earnings, the more i thought we'd see a good sized move. i looked @ all different combo's and finally, when the 115 strad came down to 9, i figure i can live with the risk reward that BIDU moves >9, so i just bought the straddle- small position.

be careful on the exit, as this stock can really whipsaw after earnings.

 

[candeo]

NTRI up big AH, we should be doing well if it opens at these levels. Now, the question is IV. Do you know what ave historical volatility is on it?

 

[Boy Plunger]

Quote from gangof4:

i'll take your first scenario (to 80)! i looked @ selling an iron butterfly also but, the more i thought about the history of this stock @ earnings, the more i thought we'd see a good sized move. i looked @ all different combo's and finally, when the 115 strad came down to 9, i figure i can live with the risk reward that BIDU moves >9, so i just bought the straddle- small position.

be careful on the exit, as this stock can really whipsaw after earnings.

In this dream of yours, will you be holding short Feb ITM Puts into Friday?

 

[scriabinop23]

Quote from candeo:

NTRI up big AH, we should be doing well if it opens at these levels. Now, the question is IV. Do you know what ave historical volatility is on it?

here ya go
BTW, thanks for the good trade. I think that'll be nice for me at least.

Also BIDU is looking good.. holding support even with downward revised earnings. Judging by lack of general movement, I anticipate IV collapse will be beautiful.

 

[scriabinop23]

Quote from Cluseau:

In this dream of yours, will you be holding short Feb ITM Puts into Friday?

yea ... also ... part of the reason i'm hedged out in March puts as well ...

Looks to be holding up.

 

[candeo]

Thanks for the IV chart. Do you think IV will drop, even with the stock up 20%? BIDU looking real good for you, well done.

 

[scriabinop23]

Quote from candeo:

Thanks for the IV chart. Do you think IV will drop, even with the stock up 20%? BIDU looking real good for you, well done.

yea IV will definitely drop.
no suspense anymore.

Look at goog, even up many many pts.

 

[gangof4]

Quote from Cluseau:

In this dream of yours, will you be holding short Feb ITM Puts into Friday?

umm, huh? you misread my post. i am long (quite unfortunately, the way things are looking) the straddle, short nothing. sure looks like i am going to be an iv dump casualty...

 

[Boy Plunger]

Quote from gangof4:

umm, huh? you misread my post. i am long (quite unfortunately, the way things are looking) the straddle, short nothing. sure looks like i am going to be an iv dump casualty...

Sorry mate. That was meant for scriabinop23 and he already answered.

Good Luck to the both of you. An IV crush is imminent.

 

[scriabinop23]

Quote from Cluseau:

Sorry mate. That was meant for scriabinop23 and he already answered.

Good Luck to the both of you. An IV crush is imminent.

yea no celebrating until market open (although i'm gleeful at the moment).

hopefully it'll open at 115 for me to exit my straddles, and then move up or down 50 pts just for you. (and me.. i may leave some of my strangles open). then we all win.