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Strategies & Market Trends : Action & Options- Taxikid plays
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To: taxikid who wrote (4155)7/8/1998 1:48:00 AM
From: gambler  Read Replies (2) of 4339
 
YHOO straddle for earnings release after the close today (Wed).

Beauty play IMO. I was eyeing this play last earnings period and the stock was around $95 or so, as I remember. The straddle (95 call/95 put) cost me around $11 per share. Total of $1100 for the whole deal. Well YHOO beat, as you know, and the stock shot to like $125 or so. Anyways the straddle was worth around $3000. It turned out to be about a 300% increase.

They are a lot more expensive this time and we are looking at about:

With the stock at 191

July 190 call 13 3/4
July 190 put 12

So a total cost of 25 3/4

So we need it to move either down past 165 1/4 or up past 216 3/4.

I know it sounds like a long shot, but it really isn't.

I believe strongly that a stock split will be announced along with earnings. I am not going to speculate on earnings as I have no idea and don't care.

If Jack be nimble and Jack be quick he can make money on an up or downtick.

Translation: make money on the calls or puts and jump ship and wait for it to go the other way to try to salvage some premium on the remaining calls or puts.

Have fun!

Gambler

P.S.

Another helpful tip: If you think you can judge the direction of this crazy high-flier, than try legging in to the play. For example if it is at $187 and you can see it is going down (Level II or something) then buy your $185 put now and wait till the stock drops to $185 or slightly below to buy your call. It will save you some premium. Now this is risky as HELL, but if you can pull it off. <APPLAUSE!!!!!> CLAP CLAP

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