Iron Condor candidates
- Thread starter Pekelo
- Start date
Oh, then vol will just keep going up. No theta will accrue as premium made even if he exits before earnings.
A prime example of the illusion of theta as (daily) cash money.
Pekelo, don't short vol for the month behind the earnings unless you specifically want to bet the realized vol on the earnings event. Which makes your IC, too tight given how this stock would move from that event.
A prime example of the illusion of theta as (daily) cash money.
Pekelo, don't short vol for the month behind the earnings unless you specifically want to bet the realized vol on the earnings event. Which makes your IC, too tight given how this stock would move from that event.
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Yes. I also don't rewind DVDs.
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The TSLA IC was more like an example, but thanks for reminding me about the earnings.
Pekelo -- consider doing broken-wing butterflies, if you don't want to fall into the "Ooops!" Trap that JackRab points out. For example,
245 +1
250 {skip}
255 -2
260 +1
260+1
265 -2
270 {skip}
275 -1
This trade nets to a -1 (x $5) hit on margin -- the same as a vertical or a (two-sided) IC.
You have the opportunity to roll up the farthest strike to nuke margin threat entirely later on.
OR you can sell the (long) vertical in front if conditions permit.
OR you can roll to a single strike vertical for $0, usually for 2 or 3 strikes.
If you aim for an inner-most delta above |0.20|, you'll get >35¢.
I used to think of this trade as a Flock Of Seagulls, until yet another viewing of Pulp Fiction.
Hm, interesting, thanks. I am tinkering with it right now...
OK, another idea. I would pick let's say 4-5 stocks that I wouldn't mind to own. Then instead of selling IC on them, I sell a vertical on the call side and a cash secured put on the put side. This way I save the buying put leg part and the ROIC is better. I make the leg wide enough so if the stock falls and got delivered, I am happy to own the stock at that price and start to write CCs on them.
How does that sound?
Example March 190/200/290/300 IC on TSLA credit is $1.59
Vertical 290/300 is $1.33 and CSP 200 is $0.67
How does that sound?
Example March 190/200/290/300 IC on TSLA credit is $1.59
Vertical 290/300 is $1.33 and CSP 200 is $0.67
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Many many people go that way -- your "...that I wouldn't mind to own" is a key factor. But the bias is still "long [the] market", and that's just not me. (As a tick-scalper / option-writer, owning the market would shorten my life.) "How does that sound?" Sounds very common; I THINK a lot of people make some fair coin in that mode; but it's not my thing.....
So you're proposing a bear call credit spread and a short put? What happens if TSLA spikes above $300? You lose a lot on the spread and don't make much on the put, right?