AVGO announces earnings tomorrow before market close, and it looks to be a juicy one. Although its IV rank is 56, this underlying is volatile, with an IV currently at 70.
Because I have the buying power available, I am going to go short strangle, but wider than usual to hopefully avoid a debacle at the end of earnings season. It's gone pretty good this season with only three problem children (YUM, IBM, and HD), and I'd like to keep it that way going into the next while I work those three out.
Here's the basic setup, which I may tweak during the day depending on how price moves intraday:
Dec 11 115/150 short strangle
POP%: 79%
Max Profit: $175/contract
BPE: ~$1328/contract
BE's: 113.25/151.75
Because I have the buying power available, I am going to go short strangle, but wider than usual to hopefully avoid a debacle at the end of earnings season. It's gone pretty good this season with only three problem children (YUM, IBM, and HD), and I'd like to keep it that way going into the next while I work those three out.
Here's the basic setup, which I may tweak during the day depending on how price moves intraday:
Dec 11 115/150 short strangle
POP%: 79%
Max Profit: $175/contract
BPE: ~$1328/contract
BE's: 113.25/151.75
