Basic:
- Stock move in a tight channel.
- Straddle priced in $26 move as of 10/28
- Implied is actually not expensive at around 33% with Nov at around 4x% and Dec at 3X%
Past earning:
- It does not usually make big move. However, the straddle does not make big decline either.
- 33% growth on avg. 41% in 1Q, 23% in 2Q,
- Last 6 earnings, beat 5 times on avg 5-10%.
- 10/14, 2370# Nov call 390 was sold. Upside keep at 390 in Nov?
- Generally speaking, no big option flow in MA
As of now, Double calander seem make sense. 380 call and 330 put for around 7.7. 380 is the projected channel top in Mid nov and 330 in the channel bottom.
ReplyDeleteAlso, Overall market risk in decreasing and implied vol is slowing. Buying the Dec no longer deem as having high risk of too much Vega explosure
MKT tanks 2 days in a row big. MA actually hit 337 the day before earning. Implied in both Dec and Nov is up sifnificantly.
ReplyDeleteAs a result. Sold the 330 put cal for 4.95 credit.
then rolled the Dec 380 call to make a butterfly with debit of $35
The end result is:
BTO 355
STO 370
STO 380
BTO 400
Net cost is 285 each combo
http://www.thestreet.com/story/11293655/1/ma-options-profitsreal-money-tag-team.html
ReplyDeletegot out at $366 for $10.21. Next wk is exp. No need to be greedy
ReplyDelete