BTC U 28.50-29.50 Call Vertical @ 0.15 . (0.06) loss
STC U 31.50-32.00 Call Vertical @ 0.75 +0.29 profit
Net Profit = 0.23 Opening Position Cost 0.36 63% return
BTO CRSR 17.50 Put @0.65
STC CRSR 17.50 Put @0.15 (0.50) loss -76% return
CRSR was down 1.39 in the after hours market after earnings, opened the next day unchanged, is currently up 2.09.
Some readers were asking the best way to manage post-earnings closing trades, I recommend doing whatever worked in the recent past.. For example, if you have a string of trades that you closed out too soon, hold onto the position longer next time. My last three earnings trades were FSR (best strategy was to close ASAP, those who held on are looking at close to 100% loss instead of 50%+ gains), CRSR (best strategy was to hold longer on the unhedged vertical spread position, best strategy was close out ASAP on the hedged position with short vertical) and CRSR (best to close out ASAP to capture 0.15 on the put before it went to zero). Options markets are strongly autocorrelated (current volatility is influenced by recent past volatility), so the crude metric of doing whatever worked recently has a strong fundamental basis.
BTO U 28.50-29.50 Call Vertical @ 0.46 (yesterday). Can get it today for less.
STO U 31.50-32.00 Call Vertical @ 0.10 (today)
This creates an off-strike butterfly/condor type spread. The upper short vertical finances the lower, higher cost vertical. Because the top wing size is 0.50 and the bottom wing size is 1.00, this spread still wins if the stock blows through the top strike, avoiding a very common loss when trading butterflies. If the stock misses earnings, the 0.10 premium received reduces the loss from 0.46 to 0.36, a 22% reduction.
Okay, looks like I'm out of the spreads expiring tomorrow. I'm going to let the ones expiring on the 19th ride for a bit and see if they move in my direction.
It’s looking good now, up about 14% after hours. Keeping my limit order to exit at about 85% of the spread; hopefully that fills at the open tomorrow. If not, I’ll try to exit for a little less.
Since I missed every single one, how much room do I have if I try to place them tomorrow? Meaning, if they move more than X, say for the HRB, a net debit of 0.40 where you entered, how much movement is too much before its not worth it?
The first two, FSR and TPX, report before the market open tomorrow, but the others you should have a shot on. Personally, I'd probably take the HRB one if I could get it for $0.50 or less tomorrow. What you could do is place limit orders to enter them now at about the prices I got, and then check back tomorrow morning and adjust as need be.
Awesome, thanks David! for FSR & TPX which way would the stock need to go in order to get in, lower? Than I get it for a lower price?
For some reason I had problems with FFIL last week and was not able to make more than 2x instead of the 5x I wanted after hours and they never filled....
FSR and TPX are releasing earnings before the market open tomorrow, so you won't be able to place these options trades on them beforehand, and it wouldn't make sense to make them after.
BTC U 28.50-29.50 Call Vertical @ 0.15 . (0.06) loss
STC U 31.50-32.00 Call Vertical @ 0.75 +0.29 profit
Net Profit = 0.23 Opening Position Cost 0.36 63% return
BTO CRSR 17.50 Put @0.65
STC CRSR 17.50 Put @0.15 (0.50) loss -76% return
CRSR was down 1.39 in the after hours market after earnings, opened the next day unchanged, is currently up 2.09.
Some readers were asking the best way to manage post-earnings closing trades, I recommend doing whatever worked in the recent past.. For example, if you have a string of trades that you closed out too soon, hold onto the position longer next time. My last three earnings trades were FSR (best strategy was to close ASAP, those who held on are looking at close to 100% loss instead of 50%+ gains), CRSR (best strategy was to hold longer on the unhedged vertical spread position, best strategy was close out ASAP on the hedged position with short vertical) and CRSR (best to close out ASAP to capture 0.15 on the put before it went to zero). Options markets are strongly autocorrelated (current volatility is influenced by recent past volatility), so the crude metric of doing whatever worked recently has a strong fundamental basis.
SELL TO CLOSE VERTICAL FSR 5.5-6.5 2023-05-12 PUT @0.60 +48%
SELL TO CLOSE EQUITY_OPTION FSR 5.5 2023-05-12 PUT @ 0.25 +47%
SELL TO CLOSE EQUITY_OPTION FSR 5.5 2023-05-12 PUT @ 0.3 +76%
SELL TO CLOSE VERTICAL FSR 5.5-6 2023-05-12 PUT @ 0.29 +81%
Very nice.
Modified the U trade slightly:
BTO U 28.50-29.50 Call Vertical @ 0.46 (yesterday). Can get it today for less.
STO U 31.50-32.00 Call Vertical @ 0.10 (today)
This creates an off-strike butterfly/condor type spread. The upper short vertical finances the lower, higher cost vertical. Because the top wing size is 0.50 and the bottom wing size is 1.00, this spread still wins if the stock blows through the top strike, avoiding a very common loss when trading butterflies. If the stock misses earnings, the 0.10 premium received reduces the loss from 0.46 to 0.36, a 22% reduction.
FSR down more 1.00 pre-open, will be taking profits at the open on the 5.50-6.50 put verticals in my main account and some long 5.50s puts in my IRA.
It is easy to lose all profit in a short covering rally.
I think there may be a misprint on the U trade. Break even would be the stock ABOVE $28.91 not below. Correct?
Yes, that's correct, Victor. Thank you for the correction. I have edited it accordingly.
CRSR spread expired today for a loss of 100%.
Exited my HRB spread at a net credit of $0.70, for a gain of 75%.
Exited the LNW spread today at a net credit of $2 for a gain of 48%.
Okay, looks like I'm out of the spreads expiring tomorrow. I'm going to let the ones expiring on the 19th ride for a bit and see if they move in my direction.
Exited my U spread today at a net credit of $0.85, for a gain of 107%.
Exited the FSR spread today at $0.54 for a net gain of 12.5%.
What are your thoughts on Unity spread since they expire on Friday. break even as of now...
It’s looking good now, up about 14% after hours. Keeping my limit order to exit at about 85% of the spread; hopefully that fills at the open tomorrow. If not, I’ll try to exit for a little less.
BUY TO OPEN EQUITY_OPTION CRSR 17.5 2023-05-19 PUT @0.65 exch XBOX
BUY TO OPEN EQUITY_OPTION CRSR 17.5 2023-05-19 PUT @ 0.65
exit TPX, or do you think it will come down before exp. date?
I'm holding here, I think it could still come down.
yea thats what I was thinking so I DCAed a little bit
You're more aggressive than me.
Since I missed every single one, how much room do I have if I try to place them tomorrow? Meaning, if they move more than X, say for the HRB, a net debit of 0.40 where you entered, how much movement is too much before its not worth it?
The first two, FSR and TPX, report before the market open tomorrow, but the others you should have a shot on. Personally, I'd probably take the HRB one if I could get it for $0.50 or less tomorrow. What you could do is place limit orders to enter them now at about the prices I got, and then check back tomorrow morning and adjust as need be.
David, for HRB, It did not give me the option of a limit order, it was Day, GTC, Fill or Kill, and Immediate or cancel with Mid at 0.38.
Which of those 4 would I use? It's set for day at the moment. I look forward to hearing from y ou.
If you entered a price in the debit field, that's your limit price. HRB reports after the close tomorrow, so Day is fine.
Thanks for helping us understand how to become a pro!
Awesome, thanks David! for FSR & TPX which way would the stock need to go in order to get in, lower? Than I get it for a lower price?
For some reason I had problems with FFIL last week and was not able to make more than 2x instead of the 5x I wanted after hours and they never filled....
FSR and TPX are releasing earnings before the market open tomorrow, so you won't be able to place these options trades on them beforehand, and it wouldn't make sense to make them after.
Correction: it looks like TPX is releasing earnings after the close, though it released other news before the open (an acquisition and a dividend).
Correction on my correction, it did release earnings pre-market too, it just hadn't appeared on the site where I had looked initially.