Opening (Margin): /MCL March 16th 69/101 Short Strangle... for a 1.70 credit.
Comments: An additive delta adjustment trade, selling the +15 delta put at the 69 and the -9 delta call at the 101.
Shortstangle
GPRO -- COVERED CALL/SHORT STRANGLE IDEASEven though GPRO appears to be in a bit of a consolidative state here, volatility in the underlying remains high, with a currently implied volatility rank of 83 and an implied volatlity of 87. Translation: rich premium to be had.
I currently have a short strangle on, so I'm not going to be putting anything on here, but I figured I'd share nonetheless.
There are two possible setups:
Covered Call
100 GPRO at 18.22
Sell 1 Feb 19th 19 Call
Whole Package: $1718 (meaning your break even is $17.18 per share, excluding fees/commissions)
Max Profit: $182 (if called away at $19).
Short Strangle
Feb 5 13.5/23 short strangle
POP%: 76%
Max Profit: $108/contract
BPE: ~Undefined (Off Hours)
BE's: 12.42/24.08
Notes: GPRO's earnings are currently scheduled to be announced on 2/4, so both setups would run afoul of that. I wouldn't necessarily let that put me off throwing on a trade, but would look to take off the short strangle in particular in profit short of the earnings announcement, just so that my setup wasn't ripped about with earnings related price action.
With the short call in the covered call setup, I would be a little bit more psychologically comfortable straddling earnings, but would look either to roll out the short call in the covered call setup to take advantage of heightened volatility and therefore enriched premium or take the whole setup off at an opportune moment, such as when price breaks 19 ... .
