Banked a goodly amount of coin on the long side today, despite the overall market spending most of the day in the red. Credit must go to our resident expert on ‘MadStocks‘ for the initial tips on the stocks that made up the majority of my winners today.
DP Sells:
- Based on their respective earnings, got rid of [[CSIQ]] puts and [[LDK]] & [[ZOLT]] calls at the open, leaving the opposite legs to ride to profit.
- Closed out [[CSCO]] earnings strangle by selling the remaining puts. Booked a loss on the position…only the second earnings strangle (out 11) this month to not result in profit. (There are a couple more, still open, that will most likely also end in a loss.)
- Closed out 2 huge winning trades, both 200% (overall position gain):
- [[CSIQ]], up 30% intra-day, started dropping towards the end, stopping out the calls and thus closing the strangle.
- [[OMG]] puts also stopped out a few minutes before close. Been riding these since last week, to the tune of 450%+ gains…
DP Buys:
- Couple more earnings straddles: [[AMAT]] & [[MELI]]. I was late in buying the MELI options, and thus missed out on the majority of the 7% pre-earnings move. May be a good thing, in retrospect, as their earnings appear to have “shit the shower” and the stock is down 10% after-hours.
- Getting back into a few more ‘traditional’ positions (as earnings wind down), with straight calls in:
- [[DVN]]-(uptrend)
- [[LUFK]]-(breakout above $78)
- [[SIGM]]-(holding support @ $20)
- [[STP]]-(CSIQ sympathy buying, still holding above $40-41)
Good Stuff DP.
Ima have to try me one of them there straddles during the next earnings season.
DP – would you recommend a strangle play on DRYS into earnings?
Believe they report on Monday, 19 May.
Thanks,
Bike
I don’t like trading DRYS all that much…mostly because it is tied way too closely to that Baltic shipping index or whatever it’s called. Thus my brand of technical analysis seems less effective. Granted, TA is mostly a tool for effective risk management & opportune entry-point finding…but I’m just not comfortable.
That being said, if you believe DRYS has it in itself to ‘blow out’ or ‘take a dump’ with its earnings, and you’re willing to pay the higher premiums (especially since you’ll have to go with June options), then by all means, go for it.
Stick with ATM options on both the calls & the puts to increase the chances of the stock vaulting out of the ‘dead zone’ (the range b/w the strikes).
Personally, I will not be partaking…but I’m sure overall option volume will show that the opposite is true for many others…