CRM jumped a bit higher than expected but settled down after the open. We ended up hitting close to our exit targets but there was actually more room to make money in the trades.
This version of this trade had a higher return but that was mainly a factor of where the strikes were vs the price at the time of exit. Overall I am very happy with both versions of the trade.
CRM jumped a bit higher than expected but settled down after the open. We ended up hitting close to our exit targets but there was actually more room to make money in the trades.
The original
The market is sorting itself out after the surprise election. There have been some wide swings the last few days and that isn't likely to be over soon. We have a balance of risks of sharp movements up or down right now. In the long run, the normal market risks will reassert themselves and that great risk will be to the downside.
FDX (Fed Ex) has their earnings this evening. This is causing elevated IV in the short term options. The trade we are taking is similar to the ORCL earnings trade we took last week. We are using a short call/put on this Friday's expiration to capture profits and a long call/put on the Oct 21 expirations to protect ourselves.
In today's session, we explored a list of possible trade targets and talked about how stocks are either dragged along by market movements or act independently. Our goal was to find some targets that were moving independently of the broad market for use in potential trades. We executed trades in WYNN and ORCL during the session.
ORCL has its earnings announcement tonight after the close. This announcement has caused the short term IV to go up over 72% due to the risks of the announcement causing ORCL to gap. This gives us the opportunity to play a set of short options that expire on Friday against a similar set of strikes on long options that expire on Oct 14th.