Earnings trades

Quote from IV_Trader:
all trades are closed :
10 trades ; 8 winners ; 2 break evens
ave gain per combo=57c
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Great trading IV! Do you often trade around earnings announcements (in a similar fashion) and is it generally only for stocks in your universe?

In regard to selling the AAPL feb strangle 72.5-95, is there a reason you preferred selling this combo over a straddle? I was looking at the hist quotes from 1/18 and AAPL traded just below 82 to barely over 84. I am a novice at selling vol so I was not sure if you would sell either the 85 or 80 straddle, perhaps the 80 since the put would not yet be ITM and McMillan says that you are more likely of assignment on puts as they go ITM due to a declining premium, etc. Perhaps the highest gamma/closest delta combo which seems to be the 80.

At any rate, if I took the median for the options hi/low for the 18th on both the potential sold combos (and the median of the hi/low for a BTC on the 19th), it seems to me that the sold 80 straddle could've yielded more profit, but with more at risk (req't) and a lesser ROI.

I only mention this for learning purposes (myself/hopefully others), did you consider the straddle sale, if you did why did you choose the strangle over it?

TIA, sd
 
Quote from skeweddude:

Great trading IV! Do you often trade around earnings announcements (in a similar fashion) and is it generally only for stocks in your universe?

In regard to selling the AAPL feb strangle 72.5-95, is there a reason you preferred selling this combo over a straddle? I was looking at the hist quotes from 1/18 and AAPL traded just below 82 to barely over 84. I am a novice at selling vol so I was not sure if you would sell either the 85 or 80 straddle, perhaps the 80 since the put would not yet be ITM and McMillan says that you are more likely of assignment on puts as they go ITM due to a declining premium, etc. Perhaps the highest gamma/closest delta combo which seems to be the 80.

At any rate, if I took the median for the options hi/low for the 18th on both the potential sold combos (and the median of the hi/low for a BTC on the 19th), it seems to me that the sold 80 straddle could've yielded more profit, but with more at risk (req't) and a lesser ROI.

I only mention this for learning purposes (myself/hopefully others), did you consider the straddle sale, if you did why did you choose the strangle over it?

TIA, sd
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yes , 95% of my trades are event/earnings related.
I chosed the 72.5-95 straddle because the DOTM vols were a bit higher the ATM , my break even was at 70.3 or 97.2 (a 1$ better that straddle).
AAPL had an upbeat guidance just a few days ago and I was surprised to see Feb vols hitting 50
 
nice post - I’ve been looking at these trades since our PM's.
They’re tricky to find, but if you get a good one it’s a cool trade with limited risk.

I did a virtual trade on yhoo and would have placed the same combo as you.

I'm also looking to trade the Kospi vols as well but getting the data is proving difficult.

Shame you’re not continuing your posts but if you use a net messaging service like msn let me know I wouldn't mind picking your brain once in a while.
 
Quote from neilcharlton:

nice post - I’ve been looking at these trades since our PM's.
They’re tricky to find, but if you get a good one it’s a cool trade with limited risk.

I did a virtual trade on yhoo and would have placed the same combo as you.

I'm also looking to trade the Kospi vols as well but getting the data is proving difficult.

Shame you’re not continuing your posts but if you use a net messaging service like msn let me know I wouldn't mind picking your brain once in a while.
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hi , Neil
yes , Yhoo trade had an excellent risk/reword. Most of the times RC are "in play" only when time to exp < 10 days , maybe I'll post some in FEB
 
so pcln + webx the vols are increacing i take it to push the price up?

Forgive my ignorannce but the vol is increasing because EPS report is due ?
 
Quote from neilcharlton:

so pcln + webx the vols are increacing i take it to push the price up?

Forgive my ignorannce but the vol is increasing because EPS report is due ?
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yes , people taken positions for report (webx , tomorrow). This was an yesterday action , would you believe if I say that today webx combo gained ANOTHER 35-40 cents !!!
Unreal
 
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