Sure. My account is with ThinkorSwim.
BOT +1 STRADDLE EBAY 100 MAR 07 30 CALL/PUT @3.80 ISE (1.60/2.20)
BOT +1 STRADDLE EBAY 100 MAR 07 27.5 CALL/PUT @4.05 ISE (3.00/1.05)
Protecting a profitable position while maximizing profit
- Thread starter Joel Reymont
- Start date
Sure. My account is with ThinkorSwim.
BOT +1 STRADDLE EBAY 100 MAR 07 30 CALL/PUT @3.80 ISE (1.60/2.20)
BOT +1 STRADDLE EBAY 100 MAR 07 27.5 CALL/PUT @4.05 ISE (3.00/1.05)
SOLD -1 EBAY 100 MAR 07 30 CALL @4.10 ISE
SOLD -1 EBAY 100 MAR 07 27.5 CALL @6.60 ISE
30: +2.5, 27.5: +2.6.
Net: 510
The puts are 267.50 underwater, 175 on the 30s and 92.50 on the 27.5s. I'm scratching my head and trying to think what I can do with them. I'll probably just leave them be and sell them when EBAY comes down in price. I still have time until March.
SOLD -1 EBAY 100 MAR 07 27.5 CALL @6.60 ISE
30: +2.5, 27.5: +2.6.
Net: 510
The puts are 267.50 underwater, 175 on the 30s and 92.50 on the 27.5s. I'm scratching my head and trying to think what I can do with them. I'll probably just leave them be and sell them when EBAY comes down in price. I still have time until March.
Overall, I bagged one winner for 10 losers. Apart from EBAY I have:
BOT +1 STRANGLE MSFT 100 MAR 07 32.5/30 CALL/PUT @.93 ISE (.45 x .48)
BOT +1 STRADDLE NFLX 100 MAR 07 22.5 CALL/PUT @3.30 ISE (1.75 x 1.55)
BOT +1 STRADDLE F 100 MAR 07 8 CALL/PUT @1.03 ISE (.64 x .39)
BOT +1 STRADDLE KMB 100 MAR 07 70 CALL/PUT @3.30 ISE (1.43 x 1.87)
BOT +1 STRANGLE T 100 FEB 07 37.5/35 CALL/PUT @.62 ISE (.44 x .18)
BOT +1 STRANGLE QCOM 100 MAR 07 40/37.5 CALL/PUT @2.67 ISE (1.39 x 1.28)
BOT +1 STRADDLE SYMC 100 MAR 07 17.5 CALL/PUT @1.57 ISE (.87 x .70)
BOT +1 STRANGLE LMT 100 MAR 07 100/95 CALL/PUT @3.02 ISE (1.49 x 1.53)
BOT +1 STRADDLE NCR 100 MAR 07 45 CALL/PUT @3.40 CBOE (1.62 x 1.78)
BOT +1 STRANGLE FDC 100 FEB 07 27.5/25 CALL/PUT @.55 ISE (.27 x .28)
I did sell Symantec and AT&T shortly after opening, just the call side, like with Ebay.
SOLD -1 SYMC 100 MAR 07 17.5 CALL @1.65 ISE
SOLD -1 T 100 FEB 07 37.5 CALL @.70 ISE
This netted me a profit of (1.65 - .87) x 100 - (1.50 x 2) = 75 on SYMC and (.70 - .44) x 100 - 3 = 23 on T. I still have the puts hanging there.
Maybe I should start a journal of stupid earnings plays.
BOT +1 STRANGLE MSFT 100 MAR 07 32.5/30 CALL/PUT @.93 ISE (.45 x .48)
BOT +1 STRADDLE NFLX 100 MAR 07 22.5 CALL/PUT @3.30 ISE (1.75 x 1.55)
BOT +1 STRADDLE F 100 MAR 07 8 CALL/PUT @1.03 ISE (.64 x .39)
BOT +1 STRADDLE KMB 100 MAR 07 70 CALL/PUT @3.30 ISE (1.43 x 1.87)
BOT +1 STRANGLE T 100 FEB 07 37.5/35 CALL/PUT @.62 ISE (.44 x .18)
BOT +1 STRANGLE QCOM 100 MAR 07 40/37.5 CALL/PUT @2.67 ISE (1.39 x 1.28)
BOT +1 STRADDLE SYMC 100 MAR 07 17.5 CALL/PUT @1.57 ISE (.87 x .70)
BOT +1 STRANGLE LMT 100 MAR 07 100/95 CALL/PUT @3.02 ISE (1.49 x 1.53)
BOT +1 STRADDLE NCR 100 MAR 07 45 CALL/PUT @3.40 CBOE (1.62 x 1.78)
BOT +1 STRANGLE FDC 100 FEB 07 27.5/25 CALL/PUT @.55 ISE (.27 x .28)
I did sell Symantec and AT&T shortly after opening, just the call side, like with Ebay.
SOLD -1 SYMC 100 MAR 07 17.5 CALL @1.65 ISE
SOLD -1 T 100 FEB 07 37.5 CALL @.70 ISE
This netted me a profit of (1.65 - .87) x 100 - (1.50 x 2) = 75 on SYMC and (.70 - .44) x 100 - 3 = 23 on T. I still have the puts hanging there.
Maybe I should start a journal of stupid earnings plays.
My 2 cts is that if you're getting good results with an option strategy, stick with it.
But if you're not getting consistent retruns with pre-earnings straddles, consider something where you receive some inflated premium as well.
As for the EBAY puts, I'd salvage the 40+ cts or so from the 30's and let the 27-1/2's ride. That bumps you up to +325 with a lottery wish. But hey, that's just me.
But if you're not getting consistent retruns with pre-earnings straddles, consider something where you receive some inflated premium as well.
As for the EBAY puts, I'd salvage the 40+ cts or so from the 30's and let the 27-1/2's ride. That bumps you up to +325 with a lottery wish. But hey, that's just me.
The most effective exit strategy seems to be to sell at the open if there was an overnight gap and to sell 20-30 minutes after the opening otherwise. My QCMO and NFLX would have been winners if I had done so but no cigar.
The other lesson is the large IV drop right after earnings. On LMT, for example, it was 18.31% when I put on the March 100/95 strangle and it's 16.89% now. My minor losses 5-10 bucks of yesterday are now super-sized 30-40 losses :-(.
You live, you learn.
P.S. spindr0, I got .50 for the 30 puts around 12:17pm. I thought of going for .55 but decided not to risk it. Kept the 27.5 put.
The other lesson is the large IV drop right after earnings. On LMT, for example, it was 18.31% when I put on the March 100/95 strangle and it's 16.89% now. My minor losses 5-10 bucks of yesterday are now super-sized 30-40 losses :-(.
You live, you learn.
P.S. spindr0, I got .50 for the 30 puts around 12:17pm. I thought of going for .55 but decided not to risk it. Kept the 27.5 put.
I use the strategy of holding for a minimum gain and once that gain is reached then trail stop by a % of that gain.
I tighten up the trail as days go by if the position becomes more profitable.
I am surprised at the amount of pullback today.
I too would have been better off selling at the open.
P.S. This is for an E-mini SP trade
The earnings strategy of buying straddles and strangles seems to be working for me so I'll definitely stick to it.
What I set out to do yesterday is put on a large number of small trades, one straddle or strangle per stock. What I realized is that even with the ToS desktop software I can hardly keep up with the positions.
This morning I was really focused on my monster EBAY winner and missed highs in KMB, LMT, NFLX, QCOM, F. Hell, even NCR popped. That's about $250 in combined losses against EBAY.
My first idea was to manage these with a trailing stop but ToS does not have trailing stops. I would have had to manually adjust the orders, furiously clicking and switching screens. I would have gone nuts!
My short-term goal then is to build software that can take a news stream from The Fly on the Wall, process it to identify earnings and significant announcements, enter trades and set up a trailing stop on each, adjusting it depending on whether there was a gap overnight or not.
I would also automatically pick a straddle or strangle, depending on where the underlying price is between strike prices or maybe depending on a bias.
Ideally, I should do this with ToS but I'll probably combine IB execution with a data feed from IQFeed for this as ToS won't have their API ready for a while.
What I set out to do yesterday is put on a large number of small trades, one straddle or strangle per stock. What I realized is that even with the ToS desktop software I can hardly keep up with the positions.
This morning I was really focused on my monster EBAY winner and missed highs in KMB, LMT, NFLX, QCOM, F. Hell, even NCR popped. That's about $250 in combined losses against EBAY.
My first idea was to manage these with a trailing stop but ToS does not have trailing stops. I would have had to manually adjust the orders, furiously clicking and switching screens. I would have gone nuts!
My short-term goal then is to build software that can take a news stream from The Fly on the Wall, process it to identify earnings and significant announcements, enter trades and set up a trailing stop on each, adjusting it depending on whether there was a gap overnight or not.
I would also automatically pick a straddle or strangle, depending on where the underlying price is between strike prices or maybe depending on a bias.
Ideally, I should do this with ToS but I'll probably combine IB execution with a data feed from IQFeed for this as ToS won't have their API ready for a while.
LOL. Sounds like you have a plan. Also sounds like you need to get to build that software.
I find that 3 earnings plays per session (each with multiple legs) stretches my limit. I manage them by bracketing them with price alerts. And if it's something like a condor or calendar strangle, I grab an existing template and set up a spreadsheet to do the hard work. Just plug in the respective B/A's and know where I stand on each side as well as the whole... sometimes in the hole as well.
It may not be the most technologically advanced set up but it helps get me throught he day
I find that 3 earnings plays per session (each with multiple legs) stretches my limit. I manage them by bracketing them with price alerts. And if it's something like a condor or calendar strangle, I grab an existing template and set up a spreadsheet to do the hard work. Just plug in the respective B/A's and know where I stand on each side as well as the whole... sometimes in the hole as well.
It may not be the most technologically advanced set up but it helps get me throught he day