With attractive earnings season plays quickly waning, I'm looking to play some instruments that still have a bit of earnings afterglow in terms of volatility. BABA (IVR 58/IV 39) is one of those plays: not only does it still have some volatility left over from earnings, it's been subject to profit-taking after a post "Singles Day" sales figures run up/sell off.
Here's the play:
Dec 18th 67.5/90 short strangle
POP%: 77%
Max Profit: $138/contract
BPE: ~$790
BE's: 66.02/91.48
Notes: I decided to go out less than 45 days, since the Dec 24 expiry had limited short put strike availability below the 1 SD (it widens to $5 increments). I'll look to take this off for 50% max profit ... .
Was filled pretty much immediately at 1.38. Love it when I don't have to chase price, but you could probably also attempt to get more if you're patient.
Here's the play:
Dec 18th 67.5/90 short strangle
POP%: 77%
Max Profit: $138/contract
BPE: ~$790
BE's: 66.02/91.48
Notes: I decided to go out less than 45 days, since the Dec 24 expiry had limited short put strike availability below the 1 SD (it widens to $5 increments). I'll look to take this off for 50% max profit ... .
Was filled pretty much immediately at 1.38. Love it when I don't have to chase price, but you could probably also attempt to get more if you're patient.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.