EWZ extension

I love the issuance of new LEAPs. The process of price discovery is in its infancy, and nobody quite understands fair value (I certainly don’t!). An EWZ ATM 7 DTE straddle (my selling vehicle du jour) can generally be sold for roughly $1.25.

If I look at my current asset to sell straddles against – the Jan 2022 $27 call / $37 put strangle which cost $16.70, I just closed that out for $16.10 and then BTO the Jan 2023 same strike strangle @ $18.75.

So I get 52 weeks additional selling opportunities at around $1.00 (being conservative) for an extra $2.65. That seems to imply that 3 winning weeks of straddle sales pays for the strangle extension.

Maybe XMAS does come early?