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MMM Double Calendar

Jul. 22, 2013 3:39 PM ETMMM, EEM
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Rather than put on the long EEM that I was looking at on Friday, I decided to go with a double calendar on MMM, which announces earnings Thursday morning. I paid .68 for it, and with the earnings release I expect the stock to move Thursday.

The short weekly options will lose a lot of IV Thursday and both "should" expire worthless (99% and 96%). The long options were just next week's expiration.

If we move close to one of the strikes by Wednesday I will have to make the decision about whether to sell or not going into earnings, but my feeling right now is that I will hold through earnings.

If we hit Friday and it is still near $115, I will most likely exit the trade then, although I could hold the long calls into next week as a strangle. Max profit is a close near $110 or $120.

Disclosure: I am short MMM.

Additional disclosure: I have a 110/120 double calendar on MMM.

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