Tuesday, April 15, 2008

Cheap near expiration option technique.

INTCʻs guidance will have saved tech for now.

a buddy of mine (with a Nice 3-series) shared this way of positioning at the end of option expiration because of the nearly 0 premium on time. it is that much more powerful when it exists in line with earnings report. so if u positioned for INTC, u could have bought an Apr22.5call and Apr19put for $19 & $17 respectively - a cheap strangle. if they hit in the money, hey congrats to u. Looking at the after-market it would have been a nice call. tomorrows pre-market is what will show how successful of a trade that would be.

i have a couple of old puts on JPM & WFC. if the same strategy was used hereʻs the breakdown
WFC: Apr30call@.05 Apr25put@.25 or.30 cheap... WORTH IT!
JPM: Apr45call@.22 Apr37.5put@.19 NOT WORTH IT, TOO FAR OUT...

So, in terms of value strangles OR just puts all report April 17(a= after/b=before bell): CAL(b), ETFC(a), MAR(b), ESLR(a)
April 18: C (b).... this may be another smoking gun...

unfortunately i have older options that has loss on time decay.
JPM: June22.5put (thereʻs still a chance... if more BSC hiding is out there...)
WFC Apr22.5put (itʻs been trading sideways...)

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