Week 2 Day 2:
Trade 1:
An attractive bull put spread on Apple is out there, before they release earnings today after close. Unfortunately, I cannot invest because I did some pattern day trades a few weeks ago and I have to get that sorted out - it takes 2 biz days. The trade is as follows: Buy May 460 Puts and Sell May 470 Puts. You make 8% in a month if Apply stays above 470 during that period. Regardless of what Apple earnings are today, it stands to reason that it will not go below 470 in the next month. In addition, there is a vol crush that is accompanied with the earnings. Out of the 8%, 3-4% will be made today itself. There will be more Apple earnings later on.
Ongoing spread trade:
My prediction of SPY closing higher was right. But it didnt close as high as I would have hoped. Anyways, any upward or sideways movement is good for the calender spread. The position is now worth $5,296 up $147 from yesterday, when it was $5,119. Yes, the numbers dont add up. This is so because the spread gains value each day (option value time decay), which does not get accounted by the broker. This time the automatic gain is around $30. Should be more around closing and if SPY settles around 138.5
Trade 1:
An attractive bull put spread on Apple is out there, before they release earnings today after close. Unfortunately, I cannot invest because I did some pattern day trades a few weeks ago and I have to get that sorted out - it takes 2 biz days. The trade is as follows: Buy May 460 Puts and Sell May 470 Puts. You make 8% in a month if Apply stays above 470 during that period. Regardless of what Apple earnings are today, it stands to reason that it will not go below 470 in the next month. In addition, there is a vol crush that is accompanied with the earnings. Out of the 8%, 3-4% will be made today itself. There will be more Apple earnings later on.
Ongoing spread trade:
My prediction of SPY closing higher was right. But it didnt close as high as I would have hoped. Anyways, any upward or sideways movement is good for the calender spread. The position is now worth $5,296 up $147 from yesterday, when it was $5,119. Yes, the numbers dont add up. This is so because the spread gains value each day (option value time decay), which does not get accounted by the broker. This time the automatic gain is around $30. Should be more around closing and if SPY settles around 138.5
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