Apr 25, 2017
Trading Block: Earnings today
- Alcoa: $33, ATM Straddle $2 - approx. 6%
- Chipotle: ATM Straddle $25.25, approx. 5.4%
- VIX 'fear' gauge plummets as French election results spark global relief rally.
Odd Block: Calls and puts trade in GGP Inc. (GGP), puts trade in Excelon Corp. (EXC) and calls trade in MGM Resorts Intl. (MGM).
Mail Block: QuestionoftheWeek:
Earnings Season is upon us. Big names are reporting soon. Which is your pick for the largest % move post-earnings?
- $AMZN
- $GOOGL
- $CMG
- $MSFT
Listner questions and comments:
- Follow-up comments from GameDay Dog:
You nailed it. I was assigned on 2 of the options. I knew that, but the (-) in my margin account was "alarming". My main thought was losing more than my spread safety net. The math did not make sense immediately. Glad to ask a ? that made others ask ?s..
My bad...just heard episode 608...Yeah, I got assigned 2 of 3 my put spread.. Way too early! I will get into better detail next time. Episode 208 had an excellent answer. That big negative number was stupid scary! I closed all the positions & sold the stock.. the 1 short put & 3 long puts made it a back ratio spread when I closed it.. it's funny now! PS - thanks for managing to get my questions on air.. once I closed the positions, I was able to sleep that night!!! Feels like I lost more than $300 though. By getting assigned the shares, it felt like I had more at risk and loss was influenced by the price of the underlying instead of the option. If that makes sense. Seeing the large margin number was not pleasant.. My credit spread had a 30% chance of being ITM when I sold it too! Hahaha..
- Question from Lesnod -How do you get out of the straddles? One side of a straddle is always a loss correct?
Around the Block/This Week in the Market
- Apr 25: New Home Sales, Consumer Confidence
- Apr 27: Jobless Claims, International Trade, Pending Home Sales
- Apr 28: GDP, Consumer Sentiment