Oh oh ....... Perhaps you meant the $45.00 weekly put? The 40s traded from $0.80 to $1.25 and the 45s from $1.48 to $2.21. And it looks a little fishy with the time stamp 6 minutes into AH and GMCR earnings report.
Oops!! Yes, my bad, the $45 weekly... I just hope it continues the slide tomorrow... I was nervous too... it got filled literally 3 seconds before markets closed no kidding! I should have put in 3 more ... oh well, WOULDA, COULDA, SHOULDA....
I was corresponding with a fella, says he is trading like Ryan on Earnings. For a year or so. He bets in total $3000 a week and if he loses, his bet, he just forfeits. He claims his secret to success is using OTM contracts. I couldnt get him to tell me, or figure out how far OTM he goes. But according to him, he does judge each earnings guess before making his bet, but when not sure, he simply bets UP. The secret to his success he said, was buying cheap OTM, so not much money was at risk and he is making 200% to 300% or better when he wins. From this comment but no proof of his balance, like has been shown by Ryan and Atticus, I took a look at this a week ago. I still do not have enough knowledge on stock companies to make any kind of judgement call, to predict an EARNINGS directional guess. So decided to forget it, after playing with it, paper trading. Just guessing is not my game I suppose? Nor could I figure out what an optimal OTM bet would be either. He did give a couple of his trades, on companies I never heard of and seemed successful at it. I suppose this is workable, if you have a list of big percentage swinging earnings report stock companies? Just FOOD FOR THOUGHT, I throw out here.
Another simple amateur novice type question. When you show the THETA number in the option chain. It reads like .01, or .02 which I assume the amount of loss for time decay per day. But WHAT is that number? How do you use it? Is it the percentage of the value of your option you will lose per day? Haven´t quite got that clear in my head right now. Though I´m sure in the distant past I learned it and forgot it sometime. Would appreciate somebody repeating it for me please? Just a technical point that has come up for me.
The "convention" is that the greeks are expressed in points. So if an option has a price of 2.00 today and a theta of .02 then theoretically it would be worth 1.98 tomorrow.
Like I said before falcon, you may not get it right the first few times, but after trading certain stocks pre-earnings for a couple of years, you'll get a great feel for them.....One of my favorite is PCLN. That one's coming up, and with EXPE and TRIP already solid, I can almost see PCLN up 50 points post earnings too. Experience counts for everything in these earning trades. That said, V jumped as I expected, but the darn DOJ probe pushed the shares to $117 lows....I now see V opening around $120 and pushing up to $122-$123 sometime during the day....I'll look to close out for loss or small profit if possible. The probe initially scared buyers, but I think the big boys who trade during the day will push it up with those EPS and revenue numbers. As for WFM, showing $88 this morning, I think I'll make the loss from Visa back from this position. I'm looking to come out breakeven. Should have put a condor on GMCR though, interesting.
Alright, I think I'm going to lef out of WFM getting out of short 90 calls at the open...should be around $1.50-$1.70 at these levels. Then I'll look to exit longs above $5.50 and try to get close to $4.00 exit on the spreads. At $1.55 cost, that should come out to a nice return. As for V, it could have been an easy day closing it above $4.30 on the weekly 120/125 spreads.....instead, now I'll have to work for the exit to minimize loss or reap in a small profit. Still heavy work and timing needed now. I'm looking for a repeat on V's late October 2011 earnings price action where shares opened at $90 and rallied to $95 (opened below previous close and closed at the highs). If I'm looking for that, then I'm also going to be exiting short 125 calls at the open. I'm looking for bid/ask at 0.10/0.15 for an exit. Hopefully I can get that. Then I'll hold onto the 120 calls, which should be worth around $1.00 at the open. It could have been worse if V was at $117, so I'll take what the market gives.