Facebook (FB) earnings this Thursday, July 26. I think a 1 strike OTM weekly strangle might be good. I figure this will be the most anticipated earnings this quarter, the press will be all over this one.
Haven't decided yet. The strangles are very expensive so I might go with just calls or some sort of call butterfly - 29/31/33.
pessmism just got priced in with znga blowing up/down whatever.. i'm guessing there not going to miss ... the implied vol on these weeklys are sick! i can't even believe it.. near 200..
your basically betting on the stock getting cut in half or something thereof with a trade like that..
the implied move is like 3.20 dollars.. implying a 11 percent move.. i'm thinking a three dollar wide butterfly ATM ... My intuition tells me nothing about this one.. i've heard though when vol is high sell. when vol is extremely high BUY.. but i just think there is to much baked into the options.. most conservative play is a wide strike butterfly to simulate a short straddle with limited risk
will be interesting to see what this sympathetic pre-earnings move will do to those options. will the IV come out any, or will it hold for the release, and price in *another* $3 move? was looking at the 27/28/29 going into the close, didn't get it. did manage to jump in out of ZNGA on the dead cat bounce AH for a dime, so i'm thinking i'll leave any FB 'earnings' play at that, and walk away happy. maybe a 25/27/29 tomorrow, but not sure, this pre-move really tosses a wrench in the works, as my negative bias has been pre-empted, and left me wondering where the next $2-$3 move will juke or jive going into friday.