Discussion on stocks with earning reports due

[ironchef]

Jul 9 GOOGL was under $550, it went up to $675 in after hour trade today. My Jul24 $600 covered call will be called away. Any suggestion what I should do? Overall a profitable trade but any suggestions on how to manage the trade instead of let it be called away?

Thanks.

 

[hajimow]

Jul 9 GOOGL was under $550, it went up to $675 in after hour trade today. My Jul24 $600 covered call will be called away. Any suggestion what I should do? Overall a profitable trade but any suggestions on how to manage the trade instead of let it be called away?

Thanks.

Maybe selling naked Put at 600 for August makes sense.

 

[xandman]

Jul 9 GOOGL was under $550, it went up to $675 in after hour trade today. My Jul24 $600 covered call will be called away. Any suggestion what I should do? Overall a profitable trade but any suggestions on how to manage the trade instead of let it be called away?

Thanks.

Let it get called away and don't kick yourself. Figure out why it moved more than you anticipated.

The spread is probably a mile wide and mm won't let you sell the option for anything more than a nickel over intrinsic value. There will be other moves in other stocks. Hopefully, you have free capital. If you have a new trade that's compelling and need the capital, them sell it.

Trading the Aug put should be done through an independent frame of mind. It is not a good hedge because it creates a new exposure to vega risk and is a huge lockup in capital. Multi month overlay strategies can work but you got to have the plan worked out in advance and trade consistently to that framework. Prevents the " What was I doing, again?" scenario.

 

[hajimow]

Let it get called away and don't kick yourself. Figure out why it moved more than you anticipated.

The spread is probably a mile wide and mm won't let you sell the option for anything more than a nickel over intrinsic value. There will be other moves in other stocks. Hopefully, you have free capital. If you have a new trade that's compelling and need the capital, them sell it.

Trading the Aug put should be done through an independent frame of mind. It is not a good hedge because it creates a new exposure to vega risk and is a huge lockup in capital. Multi month overlay strategies can work but you got to have the plan worked out in advance and trade consistently to that framework. Prevents the " What was I doing, again?" scenario.

Good advice

 

[ironchef]

Let it get called away and don't kick yourself. Figure out why it moved more than you anticipated.

The spread is probably a mile wide and mm won't let you sell the option for anything more than a nickel over intrinsic value. There will be other moves in other stocks. Hopefully, you have free capital. If you have a new trade that's compelling and need the capital, them sell it.

Trading the Aug put should be done through an independent frame of mind. It is not a good hedge because it creates a new exposure to vega risk and is a huge lockup in capital. Multi month overlay strategies can work but you got to have the plan worked out in advance and trade consistently to that framework. Prevents the " What was I doing, again?" scenario.

Thanks for your advice. You are correct, earning announcement today. I should have known as the stock had tremendous momentum the last few days but I thought I was far enough away and was safe.

Regards,

 

[hajimow]

Friday GE and Honeywell will announce before market open. I am not interested on them but GE is important.

 

[ironchef]

Maybe selling naked Put at 600 for August makes sense.

Thanks let me take a look at selling $600 Aug put.

 

[hajimow]

Thanks let me take a look at selling $600 Aug put.

You have to check it on Friday as AH rally is not reflect on the options yet

 

[ET180]

Amazon loosing as much as the SP500 on the same percentage basis during a consumer recession is incredible out performance!!! I use the previous recession as the acid test for any consumer stock.

Though, I think traditional LV stocks will have their day. Wasn't there a "dividend bubble" just a few years ago? Well, those guys still made out like bandits.

Let's stay focused on upcoming earnings plays, pls.

Does it make more sense to buy something that everyone currently wants and regrets not owning or something that everyone regrets buying thinking that they picked up the bottom and can't wait to unload as close to break even as possible? Buffet (possibly quoting someone else) said buy when everyone is fearful and sell when everyone is greedy. But is a great company with a great idea / excellent execution more likely to exemplify the first or the latter characteristic? This is basically the value vs. momentum investing / trading strategy.

 

[ET180]

looking for a pull back in NFLX to the trendline it broke out of ~$105

shorted @ 116.25 and will short more if it heads higher

this stock is euphoric so this short is risky but the risk/reward seems good to me

I wouldn't do it. NFLX does seem euphoric and could be over-valued. But there's still probably a lot of people wishing that they were in it (don't you wish you bought yesterday before earnings). They'll pile on during any dip. So why short something that has demonstrated strength? Why not short something weak and in an downtrend like oil / energy related. I look at relative strength. When the market rallies today, I notice stocks that are not participating in the rally. Those would be good candidates to short when the market weakens. Trend is your friend.