Earnings & Events-Related Option Plays

Quote from forex-forex:

  • CSCO earnings November 7.
  • Bought 10 contracts Nov 35 calls @ $0.39.
More...

Just bot 10 37.50 @ .11.

Is this a valid formula?

Divide delta by the price to determine how many deltas per dollar you can buy.

For my case the delta was .08 and the price .11, so you can buy .72 deltas per dollar spent.

For the $35 strike today it would be .23 divided by .37, or .62 deltas per dollar.
 
Good thread here. Little late, but I might as well.

For the FED meeting play I had:

+12 ES OCT31 1540 Puts @ 3.55 sold at 7

+8 ES OCT31 1545/1550 Strangles @ 10.50 sold at 5.05

+4 ER2 (hedge vs short calls from earlier) @ 825.8 sold at 820 seconds after news hit the wires.

and a bunch of short calls.

The strangle would have doubled had I legged out at the bottom selling puts 1st, but I expected a 2% run ala Sept 18, not the whipsaw we had. 20/20 hindsight of course.

Overall BE, short call gain = ER loss.
 
Quote from forex-forex:

  • CSCO earnings November 7.
  • Bought 10 contracts Nov 35 calls @ $0.39.
More...

csco.jpg

CSCO 1 year chart

Position is still open and the 1 year chart shows it's getting ready to break past $33.00, I think earnings will be the catalyst. Green dot was my entry point.
 
Quote from forex-forex:

thanks....My position got closed at $0.55 this morning at a small profit of $88.00
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I could close mine now for about $65 profit, but I think I'll wait for the EA.
 
Quote from forex-forex:

thanks....My position got closed at $0.55 this morning at a small profit of $88.00
More...

Forex,

Congrats.

A profit is a profit. This will get you a good supply of pizza. :)

I know we've mentioned this before, but your commissions seem quite high. Might be something to think about if you plan on doing a lot of trades.

AZD
 
Quote from arizonadreamer:

Forex,

Congrats.

A profit is a profit. This will get you a good supply of pizza. :)

I know we've mentioned this before, but your commissions seem quite high. Might be something to think about if you plan on doing a lot of trades.

AZD
More...

That CSCO trade - 10 option contracts - was with BMO Investorline and total commission was $70.00 ($35.00 x 2). I have opened up an Interactive Brokers account and the fund transfer isn't complete yet, according to IB's fee schedule for Canadian accounts I would have paid $40.00 commission ($2.00 per contract, open and close) for a saving of $30.00.
 
Quote from forex-forex:

That CSCO trade - 10 option contracts - was with BMO Investorline and total commission was $70.00 ($35.00 x 2). I have opened up an Interactive Brokers account and the fund transfer isn't complete yet, according to IB's fee schedule for Canadian accounts I would have paid $40.00 commission ($2.00 per contract, open and close) for a saving of $30.00.
More...

IB commission fee for US stock options is USD 0.75 per contract.

http://www.interactivebrokers.ca/en/accounts/fees/commissionStockIndexOptions.php?ib_entity=ca
 
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