Riskarb's combo to fly conversion journal

Marvell is reporting earnings on 18th May. IV is 85%. Vols will be dropped to 50% after the report. The stock went up a little after the earnings reports last 3 quarters. How can we play this.

Can we play combo to fly conversion . Is it too risk to play May options just before expiration.


I am planning to sell 55 straddle 4.70 credit. I will wait till tommorrow to see if vols go up
 
May IV is ~90%. June IV is only ~50%.
Quote from mantenar:

Marvell is reporting earnings on 18th May. IV is 85%. Vols will be dropped to 50% after the report. The stock went up a little after the earnings reports last 3 quarters. How can we play this.

Can we play combo to fly conversion . Is it too risk to play May options just before expiration.


I am planning to sell 55 straddle 4.70 credit. I will wait till tommorrow to see if vols go up
More...
 
yeah, but the may IV is useless imo. when a known news event is just ahead of expiration, near month volatility is VERY misleading, and best ignored. Buyers look more at the dollar amount they are willing to pay for the option(s) and the hope (fear) of a gap move.

The marvel vol bidup is actually LESS than the previous earnings by 10 vol points, it's best to ignore the May 90 IV number, imo.
 
Quote from volatilitypimp:

yeah, but the may IV is useless imo. when a known news event is just ahead of expiration, near month volatility is VERY misleading, and best ignored. Buyers look more at the dollar amount they are willing to pay for the option(s) and the hope (fear) of a gap move.

The marvel vol bidup is actually LESS than the previous earnings by 10 vol points, it's best to ignore the May 90 IV number, imo.
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so true , cannot build any model based on the fake last week vols
 
IV Trader,

What is the real IV for the options in the last week of expiration. Is there any model to follow.

Quote from IV_Trader:

so true , cannot build any model based on the fake last week vols
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Quote from mantenar:

IV Trader,

What is the real IV for the options in the last week of expiration. Is there any model to follow.
More...

for earnings trades I use ATM straddle price / stock price. In case of MRVL its app 7% ; if you belive that MRVL will move less than +/- 7% then short it. It all will be about intrinsic value the morning after.
btw , I am not taking trade on MRVL.
 
Last time with help from IV_TRADER, I paper traded MRVL earning using RC. It went pretty bad because the stock did not move much at all. So, I guess buying the calendar could make good money if MRVL moves just a little.

Quote from mantenar:

Marvell is reporting earnings on 18th May. IV is 85%. Vols will be dropped to 50% after the report. The stock went up a little after the earnings reports last 3 quarters. How can we play this.

Can we play combo to fly conversion . Is it too risk to play May options just before expiration.


I am planning to sell 55 straddle 4.70 credit. I will wait till tommorrow to see if vols go up
More...
 
does anyone knows about any VISG upcoming event ? Dividend ?
The put's vols are twice > than call's ( but stock is not shortable , atleast on IB its not)
 
Thought I might give this thread a bump as the vol's have jumped so dramatically the past few months. There must be some great plays out there. IV what are YOU doing:D I've been busy putting out small fire(s) with my bare hands:eek:
 
Quote from RichardRimes:

Thought I might give this thread a bump as the vol's have jumped so dramatically the past few months. There must be some great plays out there. IV what are YOU doing:D I've been busy putting out small fire(s) with my bare hands:eek:
More...

I am a scalping fool :) , very busy. A lot of stocks with inflated vols (if that what u looking for)
 
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