Is this because its OPM?
Earnings journal
- Thread starter TheBigShort
- Start date
Is this because its OPM?
hey guys, my friend just gave me a bunch of what seems like credible research on CBRL. It's based on Chinese pork and CBRL's exposure to it. In their previous earnings report, they stated that their guidance includes the expected pork vol, however, the recent rally has been insane! I think this will have quite the negative impact on earnings.
My body strike is based on my estimated move. It's not a symmetrical butterfly. Max payoff is 2x upside risk. And my conviction is higher than 50% on this one so it's a great trade in my opinion.
My body strike is based on my estimated move. It's not a symmetrical butterfly. Max payoff is 2x upside risk. And my conviction is higher than 50% on this one so it's a great trade in my opinion.
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Good-looking skew to the downside! I'm still trying to find some decent combo of a data feed and software (Python financial libs seem to have pretty much been abandoned), so I can't do vol surfaces yet, but this thesis sounds pretty reasonable.
I tried getting in, but couldn't get a reasonable fill in time (only saw this less than 10 minutes before close.) I'll look at it first thing tomorrow morning, but I suspect there's not going to be much meat on those bones by then...
Good luck with it!
I tried getting in, but couldn't get a reasonable fill in time (only saw this less than 10 minutes before close.) I'll look at it first thing tomorrow morning, but I suspect there's not going to be much meat on those bones by then...
Good luck with it!
Thanks Blue! Yea this is only playing the jump so I dont think there will be much meat left.
That's great you code in Py. I am sure it's very helpful with your trading.
Edit* send @oldmonk a message, I am sure he would not mind sending you some of his Py code. Last time I checked he had some stuff regarding the vol surface
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Thanks, will do!
Thanks for posting the trade. I didn't take it, but am interested in how this turns out.
I'm curious at how you get the max payoff being 2X upside risk. You max profit is if the stock ends the week at 157, and then you can make 8-1.54=6.46 per contract. Max loss is 1.54+(12-8)=5.54, if the stock is below 145 at expiry. What am I missing?
Another little thought is that the rise in pork has been in the last few days (and that's for the Dec futures, as opposed to the Oct ones) - so maybe this will affect next quarters earnings more than this quarters?
Having said that, the previous 10 earnings have seen the stock fall 6 times, and the ave move is around 4-6% so your choice of 157 strike is a good one.
Lets see what tomorrow morning brings.
Hey no problem ffs1001,
I definitely did not state it right. Since I am bearish, what I meant to say is if my thesis is wrong and the stock rallies, I will lose 1/2x my max profit. Of course I have larger down side risk if the stock drops more than 10% tomorrow.
I am specifically talking about the China Agriculture Products Pork WholeSale Spot Price.
It had a tremendous rally the past few weeks. Also I could care less about the current beat/miss, I am more concerned about future outlook.
Out for .31. Loss of 1.24.
LOL I closed when CBRL was 172! The fly is break even right now. oh brother
Argh. Always sucks when a trade rebounds after you've exited the damn thing.
Any thoughts on skip-strike flys for earnings? I looked at one on the put side for CBRL yesterday in the few minutes I had, and it looked like lower max profit but zero risk/positive P&L to the upside.
(I'm really focused on figuring out flys right now, but can't find any useful reading material. Putting them on and watching them is... somewhat useful, but frustratingly slow.)
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