I’m doing something a little different here.
BTO: 1,000 shares @46.25
STO: Aug 10 46.5 calls @ 3.40 x10
BTO: Aug 24 43 puts @2.67 x12
EM up = approx $1400 profit, EM down = approx $200 loss Max loss= approx $700 No upside risk, Diagonal-type risk graph, $3000 max profit on no movement.
I just wanted to show y’all how well this trade performs for earnings. WTW has been down as much as almost 15% today, yet my trade is profitable. On top of that, since it is in the “second step” I have a max profit of $1013 to shoot for. My target profit is 1/2 of max. If there is a whipsaw recovery on this stock, my max profit doesn’t drop below $505 (no upside risk).
SHAK closed for over target, $315 profit on #stairstep
WTW: Opened Stairstep for earnings today. STO Sep 70 put @.95×10, BTO Sep 90/85 put debit spread @ 2.17 x 2, BTO sep 80/75 put debit spread @1.14 x 2. Break even is $68, 25% down from current spot.
These trades are 100% winners so far
#Stairstep STO Sep 50 puts @ .75 x10, BTO 62.5/60 put debit spread @1.10 x 1, BTO 57.5/55 put debit spread @.69 x2.
Break even 48.75, which is getting close to 34% downside with no upside risk.
Important note on these trades: The breakeven is very far away, but on a significant down move there are short term losses that require duration in the trade for theta to overcome. As price drops, the “stairstep” profit levels go up.
The EA trade was bonehead yesterday. The long vol crush was 23%, it killed the trade. Lost $644, but I made $380 scalping 10 AMZN shares after hours last night, and took $350 profit from the BA trade this morning. On EA, the risk graph was just not showing the danger, but the vega level was the warning. In the future I will split the time frames for analysis and apply better vol crush to each one.
The backtester shows an almost 100% success rate on BA (5 year test) with this trade: 1. 45DTE 2. sell 10 delta put x 10 3. buy 30/20 delta put debit spread x 2 4. close/reset at 50% profit. So I will be placing this trade this morning on a rolling basis. I will probably do 5/1 on qty. Excuse the “mouse writing” on the pic.
ALGN from yesterday is up $475.00 but the market makers make exit on this a little hard, so I need a little more to cover the exit slippage.
LMT: This is currently up $180, target around $250.
BA: This is currently up $284, target is $350 for closing.
Ratio Straddle Time Spread
STO 143 Straddle @ 7.95 x8 BTO 143 Aug 3 straddle @ 8.83 x10. Sold 93% vol, bought 49% vol. Ave vol crush is 8% on EA.