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  • Research In Motion Earnings: An Options Trade That Makes Sense [View article]
    Kevin, do you see the 17 strikes? I still see only 16, 17.5 and 19.
    Dec 8, 2011. 03:05 PM | Likes Like |Link to Comment
  • A High-Risk, High-Reward Play On RIM Pre-Earnings [View article]
    If you bought for example 17.5/16 when the stock was at 16.8 and the stock goes to 15, you sell the 17.5/16 and buy the 16/14 to be neutral again. Otherwise you risk to lose your gains if the stock reverses.
    Dec 8, 2011. 02:26 PM | Likes Like |Link to Comment
  • A Good Option Strategy: Exploiting Earnings - Associated Rising Volatility [View article]
    This is a tricky part. Sometimes the IV jumps and you might be too late. I'm trying to check for every stock when is the best time to get in based on historical patterns, but it doesn't alwats work. Some stock behave differently every cycle.
    Dec 7, 2011. 08:25 PM | Likes Like |Link to Comment
  • How To Recover Your Losses In Bank Of America Faster [View article]
    Glad I could help.

    There are many overlooked options strategies, check my other articles.
    Dec 7, 2011. 08:23 PM | 1 Like Like |Link to Comment
  • How To Recover Your Losses In Bank Of America Faster [View article]
    Thanks for your comment.

    BAC was used as an example to demonstrate how to recoup some losses, it can be used in any stock.
    Dec 7, 2011. 04:50 PM | 1 Like Like |Link to Comment
  • Why Apple's Cheap [View article]
    Because there is no way to know in advance, that's exactly my point. Those who claim they "knew" the crash is coming simply don't tell the truth.

    Of course sometimes you can be lucky. Everyone is talking about AAPL today, but AAPL is “only” a 40 bagger since 1990. How about CSCO - 200 bagger? QCOM – 100 bagger? People who bought those stocks in 1990 will tell you they somehow “knew” what is going to happen? Yea, right..
    Dec 7, 2011. 03:23 PM | 1 Like Like |Link to Comment
  • FedEx: A Low-Risk Trade Before Earnings [View article]
    Monty,

    Thanks for reading the article.

    Like I explained in the article, I will usually sell further OTM strangle if we are close to expiration. Buying only the strangle will have large negative theta (time decay), the sold legs will reduce the theta.

    In this example, the long strangle alone (80/85) would have a negative theta of about 9%. Selling the 77.5/87.5 strangle reduces the negative theta to less than 4%.

    I placed the trade yesterday. Right now the stock is slightly up and the trade would not be neutral, so I would probably wait till you can make neutral with the stock around 82.5 or 85.0.
    Dec 7, 2011. 02:37 PM | Likes Like |Link to Comment
  • Why Apple's Cheap [View article]
    There are dozens of opposite cases. Read all the articles from just few months ago about the tremendous growth of NFLX or GMCR . Look where those stocks are today.

    Read all the articles how cheap BAC is when the stock was at $12-15. Read all the articles from a year ago predicting that GOOG will double in the next 2 years. Since then the stock has done nothing.

    The market is never wrong. The current price of the stock reflects what investors know NOW about the stock. If you know something that others don`t, your predictions might be worth something. Otherwise it`s a pure speculation. Any stock can go either way, regardless of what anyone might say.
    Dec 7, 2011. 01:06 PM | Likes Like |Link to Comment
  • A Good Option Strategy: Exploiting Earnings - Associated Rising Volatility [View article]
    No, what it means is that in this case, the negative theta effect was stronger than IV increase effect. In other words, the IV didn`t increase enough to neutralize the time decay. But if the earnings were not coming, the trade would lose much more.

    I have the CIEN trade too. Probably for this stock it makes sense to open later, maybe 2-3 days before earnings. This is always a dilemma. If you are planning selling before earnings, wait till the last hour, IV might still increase by few points to save the trade.
    Dec 7, 2011. 11:57 AM | Likes Like |Link to Comment
  • A Good Option Strategy: Exploiting Earnings - Associated Rising Volatility [View article]
    Interesting. So it`s almost a straddle.

    Don`t you think that if the stock moves lower deltas will provide better leverage? And if the stock doesn`t, then lower deltas might lose slightly more but not by much.
    Dec 7, 2011. 11:52 AM | Likes Like |Link to Comment
  • Apple Not A Buy-And-Hold Investment? That's News To Me [View article]
    Rocco, good article.

    AAPL is followed by millions of investors, analysts, hedge fund managers etc. The price reflects their collective agreement about the value of the stock, including future estimates.

    When someone is trying to show why AAPL (or any other widely followed stock) is undervalued, does he know something that all those people don`t?
    Dec 7, 2011. 11:48 AM | Likes Like |Link to Comment
  • Why Apple's Cheap [View article]
    Felix, I have a simple question for you.

    AAPL is followed by millions of investors, analysts, hedge fund managers etc. The price reflects their collective agreement about the value of the stock, including future estimates.

    Do you know something that they don`t?
    Dec 7, 2011. 11:16 AM | Likes Like |Link to Comment
  • A Good Option Strategy: Exploiting Earnings - Associated Rising Volatility [View article]
    You can use http://bit.ly/tFTxEq.
    Your broker should also provide this info.
    Dec 7, 2011. 09:34 AM | Likes Like |Link to Comment
  • A Good Option Strategy: Exploiting Earnings - Associated Rising Volatility [View article]
    I record the IV too.

    Which deltas are you using for the strangles?
    Dec 7, 2011. 09:33 AM | Likes Like |Link to Comment
  • Why I Dislike Holding Strangles Through Earnings [View article]
    AZO trade to be placed at the close before earnings and closed at the end of the next day:

    Buy Dec 320 put
    Sell Dec 330 put
    Sell Dec 350 call
    Buy Dec 360 call

    Credit received: $4.55
    Margin: $545
    Price to close: $2.30
    Return on margin:41.3%
    Dec 7, 2011. 09:30 AM | Likes Like |Link to Comment
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