KKD Long Straddle

CaptainObvious

CaptainObvious

I like KKD for a Nov. ATM Long Straddle. It fits my "coiled spring" chart profile. IV within reason. Options priced a little high, but not crazy. Spread of .10 is at my maximum level of accpetability. Earnings are next thursday.
Full disclosure. I am already in this position.
 
Sold the Nov 21 Calls this morning. Has moved too far too fast. Could dump the puts for a small overall profit, but I think the PPS will drop substancially after the news. Will hang on to the Nov. 21 puts for awhile.
 
Hello ,
I have some limited experience with playing straddles/ strangles about few days to couple of weeks prior to earning and that is a play on stock movement and increase in IV ..is that what you do
let me know if you do that on a regular basis and if you have some success ..
usually GOOG , AAPL, NFLX, LNKD are good for that kind of play ..
sometimes a calendar where you are long the one that expire after earning and short the one that expire prior to earning is helpful" that helps to combat some theta decay .
Also Kim kam on seeking alpha has good articles on that and here is a link to one of them

http://seekingalpha.com/article/530161-6-earnings-option-plays-for-the-week-of-may-1-4
 
Quote from semsem24:

Hello ,
I have some limited experience with playing straddles/ strangles about few days to couple of weeks prior to earning and that is a play on stock movement and increase in IV ..is that what you do
let me know if you do that on a regular basis and if you have some success ..
usually GOOG , AAPL, NFLX, LNKD are good for that kind of play ..
sometimes a calendar where you are long the one that expire after earning and short the one that expire prior to earning is helpful" that helps to combat some theta decay .
Also Kim kam on seeking alpha has good articles on that and here is a link to one of them

http://seekingalpha.com/article/530161-6-earnings-option-plays-for-the-week-of-may-1-4
More...

It's what I'm trying to learn to do, so I'm a long ways from a teacher and much more the student. That said, yes, I'm looking for stocks where the IV has not yet gone through the roof, but is expected to due to some upcoming event like earnings. It seems best to be in position a couple weeks prior, but no sooner. I'm also looking for chart profiles that fit what I'm looking for. I don't want a stock that's at a 52 week high, or at a 52 week low. I don't really want a channeling stock either which has little history of making a move regardless of news events. KKD fit the profile perfectly. Uptrend, but still plenty of room to the upside before reaching a previous high, and plenty of room to the downside before any real support came into play. I'm looking for a steady, but not too drastic 3-6 month uptrend, and something that's fallen off, but not too far during the last 60 days.
I hope this helps some, but I'm still tweaking this, and frankly don't know if this can be reliable enough to be considered a "strategy".
 
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