Sitting at a loss for both, but I still like the play and appreciate the write up. I held a small position in both overnight just to see what happens. Jumping into AMD tomorrow…LFG
Today’s a good test and a testament to Monday ER volatility plays–doesn’t work.
Keep testing this strat with ER volatility strangles and just be patient with it.
Also mark the tickers you play it with, remember the IV range and OI numbers, and do note the existing market conditions.
Create your own spreadsheet on every strat you’re testing. Brush your teeth.
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Will do! UPS on Monday last week was a major hitter. Seems I just got lucky with hitting every play, I have a good feeling about AMD and SHOP.
I’ll be sure to take a closer look at historical IV around earnings as well. Pfizer was clearly not going to be a volatile play in hindsight.
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I tried this strategy today to start on AMD. However I’d say today was a bad day to attempt it for anything. Started with a 90c and 85p near open The call was going up more than put but not much and with AMD trending upward most of the day. I ended up cutting the put. Good news is the call is now ITM and should just gain steam tomorrow. I do still like this move and plan to try it out a few more times.
Exactly. You’re in for a pleasant surprise tomorrow.
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Honestly it’s up 50 percent now and if it runs out of the gate I will probably lock those gains up relatively early. Might try to get an entry on this move for Z and get in early and see what happens.
Taking 75P and 108C this morning on AMD.
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On z?
Dang, we might not have gotten much of an IV dip. I bought one strangle when it dipped and IV has been up ever since. Both sides green right now.
Yup, i’m expecting an IV increase leading into EOD but this is looking much much better than yesterdays PFE play. Tech stocks it is.
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did you buy in yet? IV has actually fallen a bit and my calls/puts are moving on price action.
I actually took 110C as OI and vol higher plus current delta closer to 75p
Just a thought, going too far OTM results in extremely high commissions. I think I’d rather do a tighter strangle and do like 10-20 contracts instead of 50, you get similar results but with less commissions.
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I thought of this, but Ryndir is kind of banking on the options not moving much based on price action and moving IV alone. A tighter spread would be a slightly different play – not saying worse, just different.
I agree with you wholeheartedly on the commissions.
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Strangles in general don’t move much with small price moves. Even a straddle doesn’t move much intra-day on a small price move. Most of the price is determined by IV, though it is true, IV moves affect stuff on the further ends of the chain more. Though you will have to put up more actual cash to player closer to the money options for the same results.
For example, if you play 10% OTM options, and put up $10000, you might get a 20% move in value on IV for a +2000 gain
If you play 25% OTM options, and put up $5000, that same move in IV would give you a 40% gain for +2000, but you have to play 5X as many contracts, thus paying 2.5X the commission per dollar gain.
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Appreciate the insight. New to strangles here.
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Seems I need to work on my entries. With my 105C and P75 currently both in the red. I’m still new to all this, so I’ve got to know do you guys just wait until IV drops off? I guess thats the gamble that gets money
dont have thinkorswim right now, hows the IV on AMD options right now? seems like its been staying the same the whole day
Here’s what the IV for the day has looked like. Note there is a delay (15min I think):
How’s everyone’s strangle? So far… it’s watching paint dry for me. 15 mins to go…
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