Regarding SWFT, what I notice is that for the last 4 or 5 years, the stock has been treading water in a range from $16 to $26. In April the stock moved up from from $22 to 30. To my eye it looks as if $26 is the "new" support area for SWFT. Attached is a chart showing monthly candles. I would be interested in a short, on a close below $30
I was wrong: With 100K as margin on MRVL you can only sell 62 x 55-puts to gain $34,000. That doesn't make sense. You are better off buying the 47.50 calls with the 100K to make $3.00 per contract on expiration and that is the max possible. The $50.00 and $52.50 would show a smaller ROI. 217.33 x 300 = 65K profit 30 days MAX $ 165,000.00 Any other ideas?
My software is showing the 52.5/55/57.5 june fly using 3330/-6660/3330 contracts for a net debit of $99,990. A pin at 55 on expiry yields roughly $725,000. Do we have a winner?
uhmmmm one small fly in that ointment...liquidity? How many contracts can you actually buy/sell on a single 50$ stock?
Today alone, 7580 57.5s traded, 6998 52.50s. Leak this trade out over a couple days, and I don't see much of a liquidity problem for these quantities.
Not being rude, but you seem to be contradicting your "deltas are king" assertion earlier in the thread and the premise of your earlier suggestions. Have I misunderstood? Well, this could all be down to simply different interpretations. If one were to look simply at static expiration risk profiles then obviously the vertical is superior to the long call. The fly is even more superior. "is going to hit $55 over the next month" In my crazy world where I am often in the minority, I would humbly sumbit that statement doesn't imply $55 at expiration. It could well be $60 or $45 by expiration making the fly a loser. In which case, one has to consider the dynamic behavior of any position prior to expiration. This I suggest leads to an entirely different conclusion but we have now debated that and I am unable to convince you otherwise. So be it! Forgive me if my expression of patience and politeness came across as condescending for that surely wasn't my intention. I genuinely was trying to be patient in trying to get to the bottom of this topic. It seemed I was unable to convince you to look past static risk profiles and deltas. I didn't see you make that point, my mistake. Incidentally, I don't think anyone suggested it was. I was referring to absolutes. MoMoney.
If the stock hits 55 at expiry or sometime in the last week. Prior to that, there are better positions IMHO. The OP only says "over the next month". MoMoney.
LMAO, I must be bored. In the interest of diplomacy, I think we can all agree that if purely looking at the position to have if exactly $55 at expiration, the OTM fly offers superior risk/reward. I think we can all also agree that there was missing information in the original question and some ambiguity. "hit $55 over the next month" "the biggest % return between today and the day it hits $55." My feeble brain didn't interpret that as an expiration question as the rest of the respondents appear to have done. If $55 is hit in the first: ...23/24 days, the long OTM 52.5 Call delivers a bigger % return compared to the long OTM 50/52.5/55 fly ...19/20 days, the long OTM 52.5 call delivers a bigger % return compared to the long ATM 50 call. ...16/17 days, the long OTM 52.5 Call delivers a bigger % return compared to the long OTM 52.5/55 vertical. Make of that what you will.