MamaCash 8:25 am on Tuesday, October 23, 2018
Tags: Earnings ( 3,108 )

ILMN DubCal for earnings play

Bot ILMN Oct26/Nov2 double calendar 305 call/put @ 2.77.

Jeff 9:20 am on Tuesday, October 23, 2018

On the risk profile, can you explain again how you check these accounting for vol drop on TOS? Do you enter each date’s options separately, so selling the Oct 26 straddle and buying the N0v 2 straddle? Do you enter the v0l difference by comparing the vol listed for future expirations? Thanks.
- MamaCash 9:25 am on Tuesday, October 23, 2018
  
  Yes, I separate the short options and calculate a vol drop based on it dropping to the vol about 4 expirations out. Then I calculate the vol drop on the long options. If the profits from the shorts exceed the losses on the longs, then I look at other aspects like EM, chart health (what’s that?), etc.
  - Jeff 9:42 am on Tuesday, October 23, 2018
    
    Muchas gracias. I analyzed your trade and I see the profit. Since I sold a strangle on $ILMN, I’m looking to do the calendar on $EW. Chart is a bit wacky, but vol spread is huge. I’m waiting until end of day to se where we’re going to close.
    - MamaCash 9:45 am on Tuesday, October 23, 2018
      
      Yes, best to buy these as close to the end of day as possible.
      - Jeff 9:48 am on Tuesday, October 23, 2018
        
        Take a look at $BA at 350 strike, tell me what you think.
        
        MamaCash 9:51 am on Tuesday, October 23, 2018
        
        I looked at BA earlier. I think it could very likely move outside the profit tent. Also expensive so not worth the risk to me with the others I already have.
        
        Jeff 9:54 am on Tuesday, October 23, 2018
        
        Yeah, I might buy 1 or 2 rather than my usual amount.
        
        How about $UPS at 114?
        
        MamaCash 9:56 am on Tuesday, October 23, 2018
        
        I put on one in ALXN. I’ll look at UPS.
        
        MamaCash 9:59 am on Tuesday, October 23, 2018
        
        Weekly EM on UPS is about 6.5. It’s already achieved 5 on the downside this week. I think UPS looks interesting.
        
        Jeff 10:06 am on Tuesday, October 23, 2018
        
        Yeah I think i’ll probably try UPS later, and maybe a small one on BA. Thanks!
  - mortlightman 10:13 am on Tuesday, October 23, 2018
    
    MamaCash
    
    Let me see if get this correctly
    EW IV on 147 put Oct 26 = 97.99 and on a 4 exp nov23 44.29 diff =53.7
    147 Call Oct 26 = 96.8 and Nov 23 = 43.99 diff = 52.81
    
    Long side
    Nov 2 147 Call = 63.77 Nov 23 = 43.76 Diff 20
    Nov 2 147 put = 63.32 Nov 23 = 43.84 Diff 19.5
    
    Did I get this right? Because of the larger diff on shorts makes it a tradeable vehicle?
    - MamaCash 10:21 am on Tuesday, October 23, 2018
      
      Yes, that is step 1 to determine if you want to take this trade. Next, consider expected move and whether it’s probable that price will stay under the profit tent on the risk profile. Experienced traders tell me that it is very difficult to make money on double cals into earnings. When I looked at a couple, they looked like they would work and they did. So I’m doing them as long as they make $. So far, they are. Keep the risk low so it won’t be a big hit to lose the debit paid.
    - MamaCash 10:22 am on Tuesday, October 23, 2018
      
      I think part of the reason these are working is that the bearish tone in the market is keeping stocks from exploding higher even on good news. So keep that in mind too.
      - mortlightman 10:39 am on Tuesday, October 23, 2018
        
        Thanks

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