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I thought it would be fun to chronicle my options earnings trades this season. I did two last week that worked out really well BUT since I did not post them prior to the results I will not include them. My goal is to capture the IV crush with non-directional calendar spreads OR sometimes a double calendar.
I am looking at JNJ, PNC, BAC, MS, BK and UHN tonight. I do my screening in the last two hours of the day and will post the trades I entered after the close today. I will post the results tomorrow.
On Edit - After screening the list above I did two trades.
MS Sold the Apr 19 87 Call and purchased the May 3 87 Call. Cost .59 (59.00 plus com)
UNH Sold the Apr 19 445 Put and Purchased the May 3 445 Put. Cost 1.70 (170 plus com)
MS Sold for .59 debit and bought back at .70 debit (8.4 cents profit after com. 14.2% profit).
This one made a big move to the upside and what I am trying to do is trade stocks that aren't going to move much. The IV on the short option did not drop as much as I had planned.
UNH Sold for 1.70 debit and bought back for 1.51 debit. (21.6 cent loss after com. 12.4% loss)
This one made a big move and exceeded my break evens.
Tonight I could only find two favorable.
PLD
USB (This one is marginal but I took it)
Buy to Open
1 Contract ISRG May 03 2024 375 Call
Filled at $13.67
I welcome all to participate! So far I am not doing well with every pick moving beyond my break-evens. I had two trades last week that made 55% (C) and 110% (BLK) BUT since I did not call them ahead of time I am not including them. The two I put on yesterday aren't looking good; moved way beyond BE but might work out later on today. The market maker is playing games on my PLD trade. Both options (short and long) are in the money by 7.20 but the market maker is pricing the short option with 2 days left at .50 cents higher than my long term (long) option. I may have to hold it.
I closed out my USB spread for a 19% loss. I bought it for .63 and sold it for .51 (loss of 22% including com)
The market maker is playing games with the PLD spread so I am going to close it in the next half hour or sometime tomorrow.
New trades.
GPC- Sold 19 APR/Bought 16 AUG 145 calendar call spread for 5.10
AA - Sold 19 APR/Bought 10 May 36 calendar call spread for .97
P.S.- not doing very well this season so far but I will keep posting if only to give people something to laugh at.
No trade today due to platform issues (ThinkorSwim) I lost the "Analyze" page- When I hit analyze another options chain opens up.
I finally closed PLD for an 84% loss. Bought it for 1.76 and had to sell at .28. It just moved too far away from where I modeled it. I am holding GPC and AA but GPC isn't looking good. I could get 19% out of AA but the IV hasn't dropped down far enough yet.
As you can tell I am new to earnings trades and have lost enough in the past week that I need to revert to paper trading until I figure it out
I got out of GPC for a 30% loss. Bought for 5.10 and sold for 3.55.
I got out of SLB for a 44% gain. Bought for .45 and sold for .65.
I got out of AA for a 40% gain. Bought for .97 and sold for 1.36.
A very odd thing happened in GPC that I have to investigate. At the close on the day before earnings the IV was at 80 for the ATM options. Earnings came out on Thursday and as of Friday morning the ATM options increased to 300. I was told usually the IV will drop after earnings.
I will stop posting in this thread and go back to paper trading until I figure out what I am doing wrong. All I am looking for are stocks that do not move a lot during earnings.
Here are the stats for the previous four days.
8 trades. 50% win rate.
266.80 loss.
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