Does anyone here like to do short straddle on expiration day to try to capture the remaining premium decay by the close? You should get a pretty decent idea where the pin action is around noon on expiration Fri. I shorted 5 GOOG July 390 Call and 5 July 390 Put for 3.9 around 1pm and covered the trade at 3:58pm for 0.2. Not too shaby for 3-4 hours of work.
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Juicing expiration day premium with short straddle?
- Thread starter a529612
- Start date
Quote from a529612:
Does anyone here like to do short straddle on expiration day to try to capture the remaining premium decay by the close? You should get a pretty decent idea where the pin action is around noon on expiration Fri. I shorted 5 GOOG July 390 Call and 5 July 390 Put for 3.9 around 1pm and covered the trade at 3:58pm for 0.2. Not too shaby for 3-4 hours of work.
Have you established a track record in your own mind on this? I was watching OIH and saw 130 as the point of pain but didn't press it as it was just a thought as opposed to a verified plan.
Shoulda sold it at the open - that straddle was -28.95 for the day. In fact anything near the money would have made money. You have to go out to the 440/440 to see +4.90.
Quote from Eliot Hosewater:
Shoulda sold it at the open - that straddle was -28.95 for the day. In fact anything near the money would have made money. You have to go out to the 440/440 to see +4.90.
But you don't know where the pinned strike is at the open. The stock traded all over the place in the morning. It could be 380 or 390. The goal is to minimize this risk by not establishing the position until the afternoon and when the pinned strike becomes apparent.
Quote from a529612:
But you don't know where the pinned strike is at the open. The stock traded all over the place in the morning. It could be 380 or 390. The goal is to minimize this risk by not establishing the position until the afternoon and when the pinned strike becomes apparent.
So do they figure P/L for the day based on yesterday's close? I have no idea where GOOG options opened today. Were the high premiums due to high IV before the earnings announcement?
All I can say is massive negative gamma play and leave it at that.Quote from a529612:
on expiration Fri. I shorted 5 GOOG July 390 Call and 5 July 390 Put for 3.9 around 1pm and covered the trade at 3:58pm for 0.2.
But you don't know where the pinned strike is at the open. The stock traded all over the place in the morning. It could be 380 or 390. The goal is to minimize this risk by not establishing the position until the afternoon and when the pinned strike becomes apparent.
Daddy's boy
it works alot of times. But then you get expiration months where the stock shoots up or down past your straddle break even points. Very risky.
Quote from a529612:
Does anyone here like to do short straddle on expiration day to try to capture the remaining premium decay by the close? You should get a pretty decent idea where the pin action is around noon on expiration Fri. I shorted 5 GOOG July 390 Call and 5 July 390 Put for 3.9 around 1pm and covered the trade at 3:58pm for 0.2. Not too shaby for 3-4 hours of work.