CMG - potential short - anyone watching

Quote from RichardRimes:

I went ahead and took the trade...probably should have been a bit more patient. cost. was .55 for the diag and 1.05 for the sept vertical...so a bit higher than I had hoped for.
More...

made a delta adjustment. No bounce (yet) in the stock and I'm not comfortable with the diagnal...(-5 295 Aug + 5 280 Sept). While the Sept put vert is making $ I'm losing 2x on the diag.

sooo rolled 2 of the Sept 280 puts to 285 for a cost of 2.12 per contract. When/if it does bounce (and I'll give it 2 more weeks) I'll roll the other 3 contracts up.
 
Quote from RichardRimes:

made a delta adjustment. No bounce (yet) in the stock and I'm not comfortable with the diagnal...(-5 295 Aug + 5 280 Sept). While the Sept put vert is making $ I'm losing 2x on the diag.

sooo rolled 2 of the Sept 280 puts to 285 for a cost of 2.12 per contract. When/if it does bounce (and I'll give it 2 more weeks) I'll roll the other 3 contracts up.
More...

CMG still going south for you RR, congrats.
What are the pros and cons for you in trading Diagonal Spreads, versus Vertical Spreads?
:)
 

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In hindsight...(always 50/50)...I should have done fewer contracts on the diag...It is by far the more risky play. Verticals are simple defined risk plays. You can lose a LOT on a diagonal gone bad. As in any trade how you manage your over-all trade is the most important factor. We chose to bet on the direction or the volatility of the stock and if we are wrong then we lose. How much depends again on how the trade is managed. My bet on the diagonal was the stock would bounce up before the Aug exp then head back down in Sept ,and of course it still may be right...BUT...the risk could be more than I'm comfortable so right now I want to take some risk off the table.

I still have ammo in that I can do a call credit spread to entice the stock upwards:p or even a call diagonal.

Again a diagonal is both a vertical and horizontal trade/risk so honestly I'm not wild about them. You have to be right twice. Of course the payoff could be huge. Right now I'm anticipating the worst case scenario that I will have to close my diagonal at a loss...but keeping the door (hope) open by simply rolling up the Sep puts.
 
Quote from RichardRimes:

In hindsight...(always 50/50)...I should have done fewer contracts on the diag...It is by far the more risky play. Verticals are simple defined risk plays. You can lose a LOT on a diagonal gone bad. As in any trade how you manage your over-all trade is the most important factor. We chose to bet on the direction or the volatility of the stock and if we are wrong then we lose. How much depends again on how the trade is managed. My bet on the diagonal was the stock would bounce up before the Aug exp then head back down in Sept ,and of course it still may be right...BUT...the risk could be more than I'm comfortable so right now I want to take some risk off the table.

I still have ammo in that I can do a call credit spread to entice the stock upwards:p or even a call diagonal.

Again a diagonal is both a vertical and horizontal trade/risk so honestly I'm not wild about them. You have to be right twice. Of course the payoff could be huge. Right now I'm anticipating the worst case scenario that I will have to close my diagonal at a loss...but keeping the door (hope) open by simply rolling up the Sep puts.
More...

Thanks. I've only traded Singles and Verticals, no Diagonals yet. So your explanation should help me figure them out a bit more.
:)
 
OK...so this is where I tend to get impatient. So far my trade is working pretty well. I did close out the diagonal early even though it would have panned out..it was cutting too close. I did do a 305/310 call credit spread to add some credit to the trade...so right now


I'm long:
185/170 SEP put spread (x3)

and short the 305/310 SEP call spread (x3)

I am sooooooooooooooooo tempted to convert the put spread to a fly to gain some credit..BUT...I think if we fall below 290 it could free fall to God knows where and I would end up with squat.

any opinions?

edit: I know if I'm patient I could probably get 7 points off the trade perhaps even 10...right now looking at just a little over 3pts which isn't much considering the overall costs to initiate the trade. Theta becomes my friend big time if we stay down into next week.
 
Quote from RichardRimes:

OK...so this is where I tend to get impatient. So far my trade is working pretty well. I did close out the diagonal early even though it would have panned out..it was cutting too close. I did do a 305/310 call credit spread to add some credit to the trade...so right now


I'm long:
185/170 SEP put spread (x3)

and short the 305/310 SEP call spread (x3)

I am sooooooooooooooooo tempted to convert the put spread to a fly to gain some credit..BUT...I think if we fall below 290 it could free fall to God knows where and I would end up with squat.

any opinions?

edit: I know if I'm patient I could probably get 7 points off the trade perhaps even 10...right now looking at just a little over 3pts which isn't much considering the overall costs to initiate the trade. Theta becomes my friend big time if we stay down into next week.
More...

i can't see why CMG won't break down like the rest of the pretty girls.. its a bear flag right now..


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