I prefer the front month because the long option is cheaper, and my time frame is only 1-2 weeks. I go for a spread instead of a long option when the IV is relatively high, and if I find a short strike with a meaningful premium and beyond my exit target. I always draw the graph comparing the long option vs. the spread for the same $ invested. Why do you prefer the Dec spread?
looking to structure a trade in BRCM. It is at gap support right here and a "potential" TB at 42. IF it fills the gap from July 21 it will trade to 40 +/-. Today I am looking to enter Dec 40p. I will then 'leg' into Nov 40 puts as (IF) BRCM trades lower looking for a "free" trade, with a willingness to take delivery of the underlying. RQC XH currently 1.35/1.40 RQC WH .65/.70 Of course if BRCM trades back to/above 42.50 then plan B would be to (consider) selling Nov 42.50p or Dec 45p BRCM had the proverbial "upside pre-announcement" last earnings for those interested and thereby caught some sheep-analyst upgrades with one targeting $57 --- :eek: Ice *** just as I posted this BRCM "collapsed" lower so I missed my first leg into Dec 40p - guess I should post AFTER I take trade
VZ had really good results. It gapped up close to my 31.5 stop loss, but the IV dropped a little, about 8% from 24 to 21%. Did you play HUM?
so... according to you that's he ONLY reason for placing any limit order-- ---uncertainty about a trade?
You may be right about BRCM. I am tempted to play it short-term long with a target around $47, but the market mood seems to be sour so I'll stay out this one. A free trade is ... a free trade. Good luck to you!
right now BRCM is at support... my personal 'view' is that BRCM will be pinned at or above 42.50 by Nov 21 but the Q is: will it first trade lower to near the $40 level, which means it trades and likely closes below its 100 day ema-- nearer to its 150 day ema which is an indicator I tend to follow a LOT. This would be a 'classic' thrust/shake-out on BRCM and could or might be a trading buy opportunity unless one believes "sell the so-called good news" will result in it being marked even lower than $40 (maybe near 38.50) in the short term.