I had to go out for awhile. I was hoping to get back before closing but I missed it. I saw it hadn't moved much in AH but it looks like they can't find the report.
Earnings & Events-Related Option Plays
- Thread starter arizonadreamer
- Start date
I think the time is 8:00 pm EST for the report.
It looks like pizza money to me.
AZD
Pizza boy! I must going senile. Coulda sworn I posted this earlier but maybe I just Previewed it (sheepish grin). Here's my double ratioed calendar strangle (for lack of a better name) trade for OSTK earnings last week (10/18) at $29.10
Basic unit was:
+6 Oct 25p @ .30
-7 Nov 25p @ 1.30
+4 Oct 35c @ .15
-5 Nov 35c @ 1.20
Although Ivolatility indicated a lower post EA IV, the distant months in the option chains suggested higher. I went with .70
Worst case scenario on the risk graph was near either strike.
Other than my IV guess, just about everything went wrong in the AM. It went to 34+ , the B/A's had Holland Tunnel spreads and the MM's weren't splitting anything. And to add insult to injury, my leg out sucked. Despite all of this, it still turned a profit.
The idea with "kickers" would be if I wanted to sell a higher ratio of shorts to longs at each strike but wanted some OTM protection, I'd buy 22.5 p's and 32.5 c's (if they existed). Essentially, adding some 22.5/25p and 30/32.5c diagonals. Ask the East German judge what to call this (g).
Last point is to know what the potential risk/reward graph looks like (based on an IV guess) and be prepared to support the position (or lock in a gain) in the after market. For that reason, I avoid most of the three legged critters (AMEX and NYSE stks).
Good luck on your BIDU trade.
Basic unit was:
+6 Oct 25p @ .30
-7 Nov 25p @ 1.30
+4 Oct 35c @ .15
-5 Nov 35c @ 1.20
Although Ivolatility indicated a lower post EA IV, the distant months in the option chains suggested higher. I went with .70
Worst case scenario on the risk graph was near either strike.
Other than my IV guess, just about everything went wrong in the AM. It went to 34+ , the B/A's had Holland Tunnel spreads and the MM's weren't splitting anything. And to add insult to injury, my leg out sucked. Despite all of this, it still turned a profit.
The idea with "kickers" would be if I wanted to sell a higher ratio of shorts to longs at each strike but wanted some OTM protection, I'd buy 22.5 p's and 32.5 c's (if they existed). Essentially, adding some 22.5/25p and 30/32.5c diagonals. Ask the East German judge what to call this (g).
Last point is to know what the potential risk/reward graph looks like (based on an IV guess) and be prepared to support the position (or lock in a gain) in the after market. For that reason, I avoid most of the three legged critters (AMEX and NYSE stks).
Good luck on your BIDU trade.
Spin,
That's quite a combination of legs.
Glad it worked out for you. The thing is - this was right before expiration, so there was no room for error or "repair" was there? Sometimes on the RCs with some time left on the long leg, we can wait (without too much risk, i.e. with non-ratioed RCs) for the underlying to move back in our favor.
On BIDU, you can tell how much confidence I have (none) in predicting the movement of the underlying by my choice of the far, far OTM strikes.
We'll see what happens.
AZD
Quick math shows me a credit of about $0.55 with max loss at about $9.45. Long shot for BIDU to reach 480+ so your credit should be safe. Is that about right?
Almost.
Rough numbers:
I legged into the position and on the 2:3 received a credit of almost 1.50.
Max loss is unlimited past around the 491 area.
Max theoretical gain is near 1900+ per combo right on 470 at expiration. My goal is to close tomorrow.
Long shots - I've seen some crazy stuff lately, so we'll see.
AZD
ok thanks