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Strategies & Market Trends : General market lab and commentary -- Ignore unavailable to you. Want to Upgrade?

To: Robohogs who wrote (369)	4/28/2016 1:47:29 AM
From: Robohogs	Read Replies (2) \| Respond to of 668

No PR today. Earnings look to be next week although pre-announced. Bigger movement creator will be Macau April results also due next week. Vol not high enough to make tempting for next week. This was a 3-5% weight trade with 2 reward to 1 risk as originally structured, selling 92.5 straddle and buying $5 pt down puts and $5 up calls. Stock fell enough to make max loss (small as it was) more likely, esp. with bad earnings. So I closed the hurting side of trade with PROFITS to that point of 20% of max loss despite kinda being wrong but due to IV falling slightly as mkt began clueing in - IV still 10 pts high or so and that should be worth 30 cents per spread if it leaves on open using theta and vega to calc. I did the research to determine if I wanted to leave unbalanced and found what I found and sold new puts at 87.5 and bought 85s to hedge, 2x since call side was twice as wide. At that point, with embedded profits, risk went up from original $1.5 to $3 and max gain down $2 from $3. I then added a bit more with slightly more cushion and higher risk vs. reward. All in all, I started with risk equal to 3-5% of account with hope I could trade out flat or for minor loss even with a move to my long strikes. A move like FB's tonight would probably have resulted in loss equal to max gain or even closer to max loss. I am now up to 5-6% risk, again with ability to trade out if needed to try to be flat. Risk now is general mkt risk and industry risk but less company specific risk as news flow likely dead until next week. I do expect stock higher on earnings news as it rallied on pre-announcement and fell hard on LVS earnings. But industry report om April Macau revenues is a wildcard. Jon