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Strategies & Market Trends : General market lab and commentary

SPY 683.31

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Nov 12 4:00 PM EST

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To: Robohogs who wrote (370)	4/28/2016 2:12:21 AM
From: Robohogs	of 668

As a vol seller, being in this as date shifts is a homerun, if only I had gone in more aggressively. The other earnings strategy of buying strikes post earnings date and selling the week-before options would get killed on the shift. This is a calendar spread. I have been that guy! Selling the straddle may seem more aggressive, but given the risk vs. reward, I would argue you could sell the straddle and buy the strangle $1-3 inside the expected move on every liquid stock and come out ahead. Even with a SD move, receiving 75-80% of the width of the spread creates 3-4 to 1 reward over risk and allows minor profit given value of long strike ATM. It is impossible to milk max out of this but max loss does occur every 3-5 trades. One gain equal to max loss, or twice max loss, along with a bunch of 10-15% profits and modest losses makes this a winner over enough trades.

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