Question for Options experts - how would you trade this scenario?

[taowave]

Isnt your max risk $255...1500-1245 ?

The condor you have on is essentially 5 five point flys for .85 or .17 per fly..

Its a cheap shot..

Currently, the implied vol on Beyond Meat $BYND weeklies is over 100%. The company reports earnings on 7/29 after market close.

When the stock was at $200 yesterday morning, I put on 3 condors expiring Aug 2 -

Long $185P, Short $190P, Short $210C, Long $215C for a credit of $1245.

If the price is between $186-$212 on expiry, I will make money. Max potential loss is -$350.

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So my question for those who make their living trading options - in your opinion, is this a good options trade? Would you have structured this trade differently? If so, why?

Thanks for any responses from the pros.

 

[KevMo]

You do realize that your entire structure is short vega right?

Even at 100% I.V if that POS ($BYND) turns and starts to fall not only are your short 190's in trouble but your entire structure is gonna shift down...possibly by a lot, which further means your margin req is gonna skyrocket.

Hope you make money, I also hope you have a very big acct.

That's how people go debit to their brokers. You are on dancing on a razor's edge man.

G/L

Currently, the implied vol on Beyond Meat $BYND weeklies is over 100%. The company reports earnings on 7/29 after market close.

When the stock was at $200 yesterday morning, I put on 3 condors expiring Aug 2 -

Long $185P, Short $190P, Short $210C, Long $215C for a credit of $1245.

If the price is between $186-$212 on expiry, I will make money. Max potential loss is -$350.

------------------

So my question for those who make their living trading options - in your opinion, is this a good options trade? Would you have structured this trade differently? If so, why?

Thanks for any responses from the pros.

 

[destriero]

Currently, the implied vol on Beyond Meat $BYND weeklies is over 100%. The company reports earnings on 7/29 after market close.

When the stock was at $200 yesterday morning, I put on 3 condors expiring Aug 2 -

Long $185P, Short $190P, Short $210C, Long $215C for a credit of $1245.

If the price is between $186-$212 on expiry, I will make money. Max potential loss is -$350.

------------------

So my question for those who make their living trading options - in your opinion, is this a good options trade? Would you have structured this trade differently? If so, why?

Thanks for any responses from the pros.

OK, please use the per contract value next time.

It's trading at a 3.9 credit at the close. It's risking 1.1 per contract. At 4:1 it's a solid play, but what are the odds of this thing closing outside those wings?

Would you short a digital with barriers at 185 and 215 for 30/100? I probably would not.

As it goes... it's the best condor available out to AUG2.

 

[Philo Judeaus]

Just because the weekly vol is 100% doesn't mean much. Is that expensive, or cheap?

When it comes to underlyings that are newly IPO'ed I stay away until a good amount of data is collected to calculate the moneyness of the options premium.

Just my 2-cents

Cheerz

 

[taowave]

Not following you..He took in 4.15 on a 5 point IC..Hes got .85 in risk ...

how could his margin reg skyrocket??

thanks in advance

You do realize that your entire structure is short vega right?

Even at 100% I.V if that POS ($BYND) turns and starts to fall not only are your short 190's in trouble but your entire structure is gonna shift down...possibly by a lot, which further means your margin req is gonna skyrocket.

Hope you make money, I also hope you have a very big acct.

That's how people go debit to their brokers. You are on dancing on a razor's edge man.

G/L

 

[taowave]

Why stare at the screen when its a cheap punt that he most likely didnt delta hedge??

 

[motterpaul]

Here is your problem - you sold premium hoping the stock price will not change much - BUT it is almost impossible to get short so it just keeps going up.

You think your loss is limited to $320 but you have short positions which can go as far as the want. I just checked your positions at up $12 today it looks like you are $200 ahead.

Personally, I have stopped doing Iron Conders - too many legs and too much potential to go short. I am only buying puts & calls now - and I called both Tesla and Google earnings correctly - made $6000 the last few days with a $1000 risked cost basis.

I would not sell calls in this stock right now - you could get assigned easily. Also - you do not do selling premium strategies during binary events like earnings. iron Condors are generally to be used on stocks that trade in a very small range.

On earnings this stock could easily be up or down 100 points. Ask yourself where those shorts will be if that happens. Me? I am just buying puts before earnings - and probably some way OTM calls.

 

[Bum]

Here is your problem - you sold premium hoping the stock price will not change much - BUT it is almost impossible to get short so it just keeps going up.

You think your loss is limited to $320 but you have short positions which can go as far as the want. I just checked your positions at up $12 today it looks like you are $200 ahead.

Personally, I have stopped doing Iron Conders - too many legs and too much potential to go short. I am only buying puts & calls now - and I called both Tesla and Google earnings correctly - made $6000 the last few days with a $1000 risked cost basis.

I would not sell calls in this stock right now - you could get assigned easily. Also - you do not do selling premium strategies during binary events like earnings. iron Condors are generally to be used on stocks that trade in a very small range.

On earnings this stock could easily be up or down 100 points. Ask yourself where those shorts will be if that happens. Me? I am just buying puts before earnings - and probably some way OTM calls.

His losses are capped.
He's short calls & puts but also long calls & puts to limit the loss.
His credit per condor is $415 so each condor has a risk of $85.
$85x3=$255 plus commissions = max. loss

 

[taowave]

Exactly...Somr of you are over complicating this..He took a cheap shot. Only problem I see is the spreads are really wide.

Can the stock be borrowed?

Doubt the 210's get assigned,but it's always good to know


.

His losses are capped.
He's short calls & puts but also long calls & puts to limit the loss.
His credit per condor is $415 so each condor has a risk of $85.
$85x3=$255 plus commissions = max. loss

 

[Windlesham1]

With such high IV this IC is likely to fail I'd say and the stock will move big. ICs are yesterday's trade IMHO. Your strikes were 5% OTM- but now the stock is $234 having moved....5% in one day. For the avoidance of doubt this is an iron condor, not a condor (which consists of only puts or only calls).