I don't know why thought earning's had a break, maybe two months on and one month off. The realization came when FedEx was due to report this week, noticed had completed my first cycle of earnings with FDX being the first company ever played three months ago.
Opened a butterfly on FedEx, this was first time playing earning's and testing a butterfly structure. The price blew past the strikes to $290 and resulted in a complete loss. Paying for tuition.
Ratio'd Diagonal Iron Condor With Double Diagonal
Ratio'd Diagonal Iron Condor With Double Diagonal
This time playing earning's, opened ratio'd diagonal iron condor, it's an iron condor but the long legs have more time so it's a diagonal iron condor. There are more long legs than short, 2×1 so it's ratio'd. I open really far out covered calls to help offset some of the costs on the additional long legs. For example, buy to open $275 (2), sell to open $280 (1), sell to open $260 (1). Repeat for call side to create neutral structure.
Knowing how last earning's price pumped so hard, couldn't break $300 resistance to convincing level, seeing the lowered projected EPS, felt it would dump so opened the lotto put calendar play.
Don't really lose anymore with this strat but gains are not crazy either like 20-50% of the original debt paid. However, this is first time throwing lotto calendars far OTM so this may be a bigger winner than usual. I only trade companies which report Thursday after hours.
3 Months Ago FDX Was First Earning's Play
byu/breakyourteethnow inoptions
Posted by breakyourteethnow
1 Comment
Lotto plays are so far out am not worried about IV crush and want to pay as little as possible for it so I just bought the following week out.
For the actual structure, bought 22 days out which was the best cost to reduce IV ratio. Am looking for lowered IV going farther out while not elevating costs too much. In this case, going to 3 weeks out wasn’t too expensive compared to 2nd week, and IV kept dropped by good amount more. However, going to 4th week IV didn’t drop much more and costs increased a bit so wasn’t worth it. Have to shop for best deals/dates.
I want to avoid the IV crush and get more time so what & when I go to sell, the next person who buys it’s actually feasible play for them, which helps keeps my tent structures strong so they don’t collapse. It’s hard to explain. If you buy unrealistic plays nobody will want them and tent structure collapses after IV crushes.