100 bucks for a limited risk play on earnings today? What do you think, at least IV is not so high like group on. i.e.: Go long 22-25 puts for 4 cents. It would be like the Nickel slots.
(CSCO Feb 10 '12 $18 Put w) .04 play?
- Thread starter noob_trad3r
- Start date
if it were me I would try by using the feb monthly options or the march ones, that way you can recover some premium if you're wrong. I mean that's just me but if you're using it purely as an options spec play then I guess it doesn't matter as much.
The stock would have to drop by over 10% in 2 trading days for you to have intrinsic value in the options. If the share price goes down $3 or 15%, you will have roughly 33 times your money. Earnings would have to be pretty bad for this to happen. But if you want to have some fun and ask me if I would prefer what you are suggesting over the casino, I would say yes. 
The $19 strike are trading 13-18 cents today. Only a 5% drop to be in the money intrinsicaly, but a lot more upfront for the options.
The $19 strike are trading 13-18 cents today. Only a 5% drop to be in the money intrinsicaly, but a lot more upfront for the options.
Quote from Churchill:
The stock would have to drop by over 10% in 2 trading days for you to have intrinsic value in the options. If the share price goes down $3 or 15%, you will have roughly 33 times your money. Earnings would have to be pretty bad for this to happen. But if you want to have some fun and ask me if I would prefer what you are suggesting over the casino, I would say yes.
The $19 strike are trading 13-18 cents today. Only a 5% drop to be in the money intrinsicaly, but a lot more upfront for the options.
There have been a big swing on earnings, so it makes for an interesting gamble.
http://in.reuters.com/article/2012/02/08/cisco-earnings-options-idINDEE8170IG20120208
The one exception in the last six quarters was in August 2011, when the shares gained 16 percent the day after results.
Wall Street expects Cisco to report a stable quarter, buoyed in part by improving enterprise demand in the United States.
Cisco has outperformed its peers this year, rallying 11.7 percent, and options activity has been tilted to the bullish side.
Heading into Wednesday's earnings report, investors bought 3.61 calls for every put on three U.S. options exchanges as new positions over the past 10 trading sessions, according to Schaeffer's data. That gauge clocked in higher than 79 percent of the readings taken during the past year.
Who is your broker?
I see bid 3 ask 4
I am going to wait and see if it does bid 2 ask 3
maybe try for 3 cents.
I put in a limit order for 30 contracts at 3 cents.
For $100 bucks? why not play 1 21 call and 1 20 put for $79 plus commish. Saves you $10 for drinks afterwards 