I set the price slices to my break-even points which lie at $103.26 on the downside and $131.73 on the upside. As you can see the options market are pricing in a 100% probability of trading within this range between now and expiration. From what I can find I do not see any major news announcements on tap between now and when these expire.
Now lets look at the chart. To me $100 looks like a nice support level and I think that the 50 day MA (Yellow Line) will act as resistance on the upside at least in the short time frame of this trade. Next I want to draw your attention to the Historical volatility vs IV. There is about a 25% gap. So I am trying to sell vol on this play.
PE is around 16 on this name.
I am looking at a possible profit of $510 on a risk of $990 or 51% RoR.
Updated position Snap shot:
Remember I closed out V, GDX, and YGE for a small loss today. I think overall I took about $120 loss total closing these out. Detail will come at end of the month.
As you can see from above I did sell a few Iron Condors on GOOG going into earnings. This was an idea out of IWO.
ReplyDeleteGOOG just reported and beat expectations on both rev's and EPS. I guess the Rev's was not the beat they were looking for as GOOG is trading down about $30 in the after hours.
Our position is still in tact. If it is still trading down at these levels I may look to sell some more put spreads in lower strikes.
For example I am looking at the 490/500 put spread. It closed with a mark at $0.60. Playing with the options pricing model with the stock dropping $30 it could be trading for as much as $2-$2.50 tomorrow morning with GOOG at around $550. The upper range is adjusting volatility upward by 10% as this increase as price decreases. The lower range is just adjusting price.
I'm actually comfortable selling a put spread on GOOG if it opens in the $550 range on Friday. I would just keep rolling out the spread to lower prices if need be, eventually it will find a bottom. I'll wait to see where it opens before I price out scenarios so I'll let you know what I'm going with.
ReplyDelete