Another option trading strategy

Discussion in 'Options' started by ggelitetrader000, Aug 31, 2017.

  1. Well, as I mentioned, it requires some serious backtesting to find the right stocks at the right prices and the right timing.
     
    #81     Nov 15, 2017
  2. Some change of strategy. Bought ANF strangle, FL, SPLK straddle few days ago to see how much it will go up based on its volatility. They are all giving Q3 earnings today (after) or tomorrow (before) so I will probably dispose all of it today. Right now the volatility for these are quite (in the hundreds 200-300%) but option price simply did not go up as I predicted. I was hoping either side will go up by around 400-500% however it stuck in its original price. Looks like a net effect of time decay and volatility is almost null. I am assuming either of these stocks did not make much movement perhaps that is why. At least i did not lose much.
    Since in the past, I have earned nice and also burned badly by keeping past the earnings (after which substantial movement will gain otherwise it will collapse completely). I am more likely to dispose of it.
    Once dispose of it, I might either take a chance by trying to predict the movement after earnings by purchase long time call or put with moderate amount 3K$-4K$ (by buying long term reduce the risk) or short term naked call or put with small amount (500-100$) which I can afford to lose. I do know most or all of these stocks are going to make a huge movement by tomorrow.
     
    #82     Nov 16, 2017
  3. The stocks you mentioned are not among the best candidates, and the prices this cycle were not favorable.

    As a side note, it is completely unrealistic to expect 400-500% gain on either side. Our profit target on the whole straddle is usually 10-15%. Sometimes you can get more on a strong move, but it is not common.
     
    #83     Nov 16, 2017