What about a staddle/strangle swap on GOOG?

[boogafish]

Beakevens are 418 and 483. You can lose more than the debit, though, but only after about a 100 point move or so.

I know OP likes to play GOOG earnings and GOOG expiration---this is double the fun. Any other recommendations on how to play them? I'll have to throw my trade on today of course, whatever it happens to be.

[boogafish]

Argh, I'm having probs with the picture.. It's saying the uploader file is full.

Anyways, it's selling 1 Google Apr call and 1 Apr put @450 and buying a May 460 call and buying a May 440 put.

Max profit is in the 2660 area if stays around 450....although it might be wise to sell at the 460 range to center it and protect against a move to the upside..

[optionpundit]

Beakevens are 418 and 483. You can lose more than the debit, though, but only after about a 100 point move or so.

I know OP likes to play GOOG earnings and GOOG expiration---this is double the fun. Any other recommendations on how to play them? I'll have to throw my trade on today of course, whatever it happens to be.

I posted it...already booked 44% profits in intraday....game plan...buy...hold...sell before earnings by making money from the "rise in IV" and "greed"....

I shall update results in my original post...now I am in for the call...after closing puts for 44%...

[kevin]

OP,

Are you holding this overnight, or closing it into the close of the day?  I assume this play is profiting from the collapse of the APR vol, but will this vol come out at end of day, or after earnings report?  This is my first GooG earnings play, and quite reinforcing for understanding the Vol impact.

Thanks,
Kevin

[optionpundit]

OP,

Are you holding this overnight, or closing it into the close of the day?  I assume this play is profiting from the collapse of the APR vol, but will this vol come out at end of day, or after earnings report?  This is my first GooG earnings play, and quite reinforcing for understanding the Vol impact.

Thanks,
Kevin

No, I am not holding overnight...closing roughly 10-15mins before market closes.

[kevin]

Excellent OP, thanks. 

I find this particular trade very fascinating, especially how Delta / Gamma are non existent at this point.  Purely a VEGA/Theta trade and so far so good.  Tight watch on it though, and not for the faint of heart.    Do I understand correctly that the APR Vol will continue to decrease as the day progresses, and this is the profitable edge?? 

I will post all my fills once the trade completes.

Kevin

[streetman]

Kevin...

actually the opposite...

Vega should increase as day comes closer to the "widow maker"(anouncment)

everybody is already counting their earnings on the goog Gap tom... so they keep bidding up the front month.

tom when they unload positions... VOl collapses...in front month.

so you try and manage all the other risks to profit from this...

a week ago april's were at 57 IV... to yesterday i think they were at about 90... this Am at about 107... and i saw as high as 120+ so far today...

if you got in on a straddle or strangle then your positive vega will give you your edge... even with out movement in underlying... theta gets tossed out almost.. because people are irrationally bidding it up regardless of espiration... they only want to be in it for post market today.

Damian

[kevin]

Damian,

Thanks, I appreciate that.  My anxiety is now elevated because there are issues w/ToS platform currently.  Data server is down.  Prob because I entered. 

[kevin]

Ok the reboot didn't solve, and a phone call to ToS confirmed they are having significant data feed issues right now.  Everyone watch the posn close when it comes back up. 

Damian,

I guess I am not following clearly. 

I expect you want to sell the juice (short APR) when the Vol is high so that you can buy it back cheaper when the Vol comes out (after earnings).  It would have to make >10% move to hit the breakevens, and even at that, this was a spec play NOT income.  The back month MAY options are primarily as a protective hedge to avoid catastrophic loss from selling naked options, and the Vol change there is fairly negligible.

Please forgive my continued posts, but just attempting to understand the setup.

Kevin

[streetman]

i think we might all be talking about different things???

i am talking about buying straddles/strangles.. today on GOOG??

if that's what you are mentioning kevin... then my above post holds true...

please explain your position and strikes... so i can better answer your question.

ttyl

Damian

[kevin]

Ok.  Yes I am talking about a GOOG play today, based around earnings.

Specifically, SELL APR 450Call 450Put, and BUY MAY 450Call 440Put.  This has BE of 412.96 and 495.30 at expiry.

By selling the APR when the VOL is crazy high, we are taking in more juice (premium).  The MAY VOL is up, but in relation to the HistVol not that much.  47.66% currently.

After earnings report, the APR vol will plummet back to a reasonable level, and we can buy in our shorts before expiry friday.  The MAY vol will drop as well, but in relation to how much the APR will drop, it should be worthwhile.  I am posting a screen shot that takes out 50points of VOL for APRil and 5 points of VOL out for May, and reflects the position tomorrow.  This is my first trade like this, so I don't know how much the vols will come down, but 50 and 5 are just my estimates.

I don't think I am misunderstanding this, however, my position is to keep it open overnight and wait to see what earnings will do. 

Again, this is a SPEC trade, not an income type of trade.  I am willing to take 100% loss as this is a small part of the overall portfolio.

Kevin

[kevin]

The screen shot didn't come through, sorry.  Upload folder said FULL.

[streetman]

reply essentially sounds like a calender spread...

i have looked at some of these plays... and from what i see so far i cant find a good edge...

last goog earnings this type setup would have failed... though mild loss.... however the skewwas nowhere near as favorable

Intc earnings last time also didn't work and skew was very large... INTC earnings this week skew was almost identical to googs... April 100%... may 50%... this also didn't work.

i have looked at a tone of them... and all i can conclude is it is inconclusive...

However... i do think on UBER retail stocks like goog,aapl,rimm,siri,v,ma, you can buy straddles and strangles intraday and close out before earnings... that does seem to have an edge...

if you dint have an edge you should make Risk free rate of return at best. not good after commissions.

i don't mean to be a pessimist... but you don't need somebody to tell you what you want... i want us all to make a $%%^&*@ of money

Damian

[sri1dhar]

Kevin,

I don't mean to add more confusion with my late response. I apolozize in advance if I did.
 
I think OP's strategy is buying a straddle or a strangle in the morning and selling it before today's close and not keeping the trade until after earnings. This strategy is banking on IV explosion as the day progresses and the assumption that IV is the most just before the close.

Regards
Sri

Ok.  Yes I am talking about a GOOG play today, based around earnings.

Specifically, SELL APR 450Call 450Put, and BUY MAY 450Call 440Put.  This has BE of 412.96 and 495.30 at expiry.

By selling the APR when the VOL is crazy high, we are taking in more juice (premium).  The MAY VOL is up, but in relation to the HistVol not that much.  47.66% currently.

After earnings report, the APR vol will plummet back to a reasonable level, and we can buy in our shorts before expiry friday.  The MAY vol will drop as well, but in relation to how much the APR will drop, it should be worthwhile.  I am posting a screen shot that takes out 50points of VOL for APRil and 5 points of VOL out for May, and reflects the position tomorrow.  This is my first trade like this, so I don't know how much the vols will come down, but 50 and 5 are just my estimates.

I don't think I am misunderstanding this, however, my position is to keep it open overnight and wait to see what earnings will do. 

Again, this is a SPEC trade, not an income type of trade.  I am willing to take 100% loss as this is a small part of the overall portfolio.

Kevin

[optionpundit]

u know what...right now I am grinding my teeth....grrr...i just sold those 500 calls for $0.60 a piece  at the close....google is up +$50...these $0.60 might have become $6 tomorrow.....~1000% and i had tons of those!!!!!

don't u smell.....coulda, woulda, shoulda, big timeeeee!!!!

I shall post my screenshots and lessons learned later,
Profitable trading, OP