Rationale:
-42DTE in the June expiration and I wanted to continue building out June options book
-high priced stock that offers decent premium when IV is sort've midrange
-earnings in a little over a month so need to watch and manage this trade closely/carefully
Recap:
IVR=38-45% (didn't document time of and IV came in into the close)
IV/HV= 109.4%
Potential ROC= 370/3299=11.2%
Key corporate events (earnings, dividend, investor day, etc.)= earnings on 6/18
How much risk should/did I take? appropriate risk via position sizing and where I sold the short options
Trade Planning
-structure: strangle
-major support: 268, 262
-add point: NA
-stop loss: 1.5x credit = $555
-take profit price / risk-reduction plan: 50% profit
2019-06-04 16:32:18
-rolled call side down from 240 to 277.5 for $2.49 credit
-ideally would have rolled this down yesterday (I think I could've gotten a credit in the 3.20-3.40 range) but I didn't have any more daytrades
2019-06-08 22:42:40
-rolled up put side on friday from the 240 put to 265put for additional $2.27 credit
-total credit collected: $8.46
-note that I would've been able to take strangle off for 50% winner if I left original position alone (should try not to manage positions where short strike isn't breached or close to getting breached)
-don't think one side trading for .25 or less is enough reason to roll up/down one of the sides; especially on high priced names
2019-06-17 16:09:10 (journaling after the fact)
-got out of this trade for a loss, could've done much better if I held a day longer
-lesson learned here is to be patient -> one leg trading for cheap isn't reason enough to roll it down / up (risk rolling chasing market in one direction, only to have it reverse on you )
Execution detail:
Date/time | Symbol | Side | Price | Position |
---|---|---|---|---|
2019-05-10 14:05:31 | JUN21 19 305 CALL | sell | $1.880 | short |
2019-05-10 14:05:31 | JUN21 19 240 PUT | sell | $1.820 | short |
2019-06-04 10:19:03 | JUN21 19 277.5 CALL | sell | $2.620 | short |
2019-06-04 10:19:03 | JUN21 19 305 CALL | buy | $0.1300 | 0 |
2019-06-07 14:30:39 | JUN21 19 240 PUT | buy | $0.5300 | 0 |
2019-06-07 14:30:39 | JUN21 19 265 PUT | sell | $2.800 | short |
2019-06-13 10:23:20 | JUN21 19 277.5 CALL | buy | $7.500 | 0 |
2019-06-13 10:23:20 | JUN21 19 265 PUT | buy | $2.730 | 0 |
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