goog option plays for earnings week

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Quote from rickf:

Yepper, some good advice: I paper-traded that 580/590/689/690 IC on GOOG and see the impact of IV on delta as the underlying approaches the stop trigger (600) on the put side of the spread. OTM call side is fine, but the put side is under some pressure. Definately seeing the effect of IV, for sure.

Though I wonder, in such cases where you encounter an IV "trap" and your underlying is threatening the put side of your IC, would it make sense to either double-down on your high call spread and/or turn the side of the IC that's under pressure into a ladder by buying another set of puts below (ie farther OTM) than your OTM long put....or perhaps adding to the long put you already have? I think I'll try both and see what happens. Thank gods for paper trading, eh?

There's a lot of theories on how to adjust ICs. I personally don't trade them much. I guess it depends on when you'd do the adjusting though. If you are making pre-earnings adjustments, like buying more puts, the risk of course is that you'd be paying top dollar and it would eat into your IC profit. If you think the risk is that great of a downmove out of your range, the best adjustment might be to just close the trade with a small loss.