Regarding SEBL July 45. I am paying particular attention to this because it's one of the few times I've done a buy/write, and one of the few times I've written the near month call. Also, looking to see how it acts as it is close to being in the money with very little time left.
With earnings out the 18th, this option effectively has 7 days left to go where it will go. It sold between 2.50 and 3.10 today, closing at 2.50, down .30, on fair volume.
The stock was up about .50 to 43.50 on light volume, about in line with the general market.
I would expect that if the stock remains roughly flat, the option will lose about .35/day.
So, if I wanted to reduce the risk of having this option out thru earnings, a fair price would be 2.15 tomorrow, 1.80 the next day and so forth, on to about $1.00 Friday.
If I was hopeing to buy this back on a general market pull back of say 1-2% in which SEBL participated, I would put in orders of 1.95, 1.55, 1.15 and .75 on each successive day this week, adjusting or abandoning each day depending on how the stock traded, given that the option seems to react about .20 for a $1.00 move in the stock. (Theta?)
Max pain still shows 37.50-42.50, which is only an indication, but does have some validity.
Does this sound about right?
ARS |
