All my opening and closing trades are a good idea - at the time I make them. Due to the volatility of options I know there is a high chance of leaving lots of money on the table whenever I exit a position, or the options expiring worthless if I stay in. Damned if you do, damned if you don't. My opinions about the underlying will vary before, during and after the trade due to market conditions, cold feet, fear, greed, second guessing, etc. The market got off to a slow start today so I decided to sell. I don't buy or "leg into" debit spreads under any circumstances. They cap the upside WITHOUT any protection from the downside.
I sold-to-close the 585 call for a net credit of $65 (bought at $0.85, sell at $1.50). Your idea was to leg into the 585/590 call debit spread for a net credit of $20 (long 585 call at $0.85, short 590 call $1.05). As of now GOOGL is at $577.00. The calls are OTM and could expire worthless I have booked my profit already.
i know, but according to you right now, what is the probability that at anytime tomorrow googl is above 590?
When does the IV ramp up usually happen ahead of earnings? Does it always peak on earnings day around 3pm-ish ET if the announcement is AH? Something you need to be careful of if you want to write.