ROKU options are selling at a very high premium (time value) due to very high IV%. To take advantage of the high premium I opened an Iron Condor. I chose an iron condor because I don't have a strong bias (bull/bear). This strategy provides a little more cushion whether it moves one direction or the other. I would have chosen a credit spread strategy if I did have a strong bias.
3 Days till expiration. 56/66 Calls & 45/35 Puts. Premium $3.58 per spread. ROKU price at order execution $50.02 Break even $59.58 & 41.42
GREEKS D G T V Net Spread: .0034 .0400 -.0514 .0048 IV% on each contract is between 219% - 260% (versus 61%)
交易進行
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Earnings and forecast occurred. Earnings good, forecast disappointed. Stocked fell. However, as expected, IV% dropped by 150%. Even with big price drop, trade is still working out in my favor.
To be safe and remove risk on the books, I am attempting to close the trade early. No one would pass on a $1.50-1.70 credit per option spread for a 1 day trade. That is a great trade. If I wait the 3 days, I could keep the $3.58 received OR potential loss money.
手動結束交易
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Closed positions for a $1.90 debit. 3.58 - 1.90 = 1.68 (168/PER contract) gain in less than 24 hours.
@JLJ002500 That was a very close trade, but good for you.
JLJ002500
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@themdtrader, It definitely had risk. But the IV% was so high leading up to the earning reports making the option premium outrageously expensive. It is almost a certainty that the IV% would drop substantially following the news no matter if the news was good or bad, which it did (dropped about 160%). That greatly reduced the premium allowing me to buy back the options for much less than I sold them.
I have found capitalizing off of others fears leads to a successful trade more times than it doesn't.
themdtrader
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@JLJ002500, I feel you man, and I get it. We can't get any reward without taking risks.