MSFT Options - Opening Sep22 Oct20 Put Calendar 72.5
https://www.tradingview.com/chart/OsBXckpZ/
It is right around the time that the volatility may expand pre-earnings (E announce in about a month). This trade will benefit if volatility does indeed expand.
Typical historical IV expansion is about 50%, this kind of boost can override a lot of price movement - msft price when it moves tends to run up prior to earnings which could allow one or more rolls of the short leg, all of the weekly possibilities have decent liquidity for that. Let's see what happens!
Calendar
short Sep 22 72.50 Put
long Oct 20 72.50 Put
debit .63 ($63/contract)
Theta .71 Delta -10.2
It is right around the time that the volatility may expand pre-earnings (E announce in about a month). This trade will benefit if volatility does indeed expand.
Typical historical IV expansion is about 50%, this kind of boost can override a lot of price movement - msft price when it moves tends to run up prior to earnings which could allow one or more rolls of the short leg, all of the weekly possibilities have decent liquidity for that. Let's see what happens!
Calendar
short Sep 22 72.50 Put
long Oct 20 72.50 Put
debit .63 ($63/contract)
Theta .71 Delta -10.2
Transaction en cours:
Rolled short Sep 22 72.50P to Sep 29 for a credit of .13 this takes break-even from .63 to .50.
Transaction en cours:
9/15/17 Rolled shor Sep29 72.5P to Oct6 74Pfor a credit of .35 and new break-even of .15. MSFT price $75.30. New position short Oct6 74P long Oct20 72.5P (Put). The implied volatility has risen about 25%.
Transaction en cours:
General update. This trade is looking to profit by the volatility expansion that occurs with many stocks beginning about 30-45 days prior to an earnings announcement. At position open IV was just under 30 and at close Friday a little over 39% or just over 30%. The price has moved up and down without changing much which is ideal for this Calendar Spread strategy. In other words, all is on track! Let's see what the coming week brings (and keep smiling!).
Transaction en cours:
Clarification of above. IV Friday 39% - that is an Increase of just over 30%.
Transaction en cours:
Did not log date rolled Oct6 short 74P to Oct13 credit .20 break-even -.05. then on 10/5/17 rolled the short Oct13 74P to Oct20 credit .17 break-even -.22. As hoped, the volatility has been rising (pre-earnings) and this is within .03 (mid price to profit taking order price) of closing. We will see. If you are following this thanks and keep smiling!
Trade fermée: cible de profit atteinte:
Rolls as Theta decay banked short premium got a little costly on a trade that was already skinny at the start but worked okay.
