Update:
Well, buying the AUG40 straddle on BRCD would have been a far superior trade than selling it, to say the least. It would have paid about $700. If I had stayed with the original AUG40 short straddle only, it would have lost over $700. By adding the second short straddle at AUG35, the loss would have increased to about $1000 if I had stayed firm. Rolling as I did out to September, made the drawdown as of close today about -$700. I did not let it evolve into that. I had to be away some, and so I created a fairly neutral position. After far too many trades, swallowing way too much in spreads, but catching a nice short on the stock after earnings, I'm down about $300 and now have a somewhat bullish complicated thing that is more or less a synthetic short with two short puts written against it. If the stock does not move, time premium will erode for a forward gain of about $400, leaving me flat overall. If it will creep up to $30 for me, I will come out ahead.
After following BRCD for a while, I don't expect it to creep anywhere. I will adjust as the market dictates, hopefully for the better. This is NOT my idea of how to swing trade options. It has been, and is a mess. I am holding two longs for September: CTL straddle at 35, and a QCOM strangle with 60 call and 65 put. I'm hoping for some early movement to take profits before much time premium erodes.
Dan |
