Chuck451 195 Report post Posted March 10, 2014 (edited) For the last 4 cycles, straddles for KKD have paid off thru earnings. I played this last cycle with a small allocation, and closed just after opening for a 24% gain, and if I held on to it near closing I could have gotten over 60%. What do you think? Edited March 10, 2014 by Chuck451 Share this post Link to post Share on other sites
Kim 7,740 Report post Posted March 10, 2014 It definitely looks good most of the cycles: Share this post Link to post Share on other sites
Hany 1 Report post Posted March 10, 2014 For the last 4 cycles, straddles for KKD have paid off thru earnings. I played this last cycle with a small allocation, and closed just after opening for a 24% gain, and if I held on to it near closing I could have gotten over 60%. What do you think? Chuck, On the last earnings date (Dec 2), KKD dropped 16% in after hours trading after reporting earnings, and it closed down 20% at the end of the day. This is a huge move and larger than the 12.5% implied move. Was this really profitable? Can you tell us more about the trade? Kim, Why do you think this looks good? Share this post Link to post Share on other sites
Kim 7,740 Report post Posted March 10, 2014 Well, if the actual move is much larger than the IM, then the straddle performs well. Take a look at the table I attached. Share this post Link to post Share on other sites
Hany 1 Report post Posted March 10, 2014 oops, I thought he said calendar, not straddle. sorry. Share this post Link to post Share on other sites
mnwind 0 Report post Posted March 11, 2014 It looks like through-earning plays are gaining some popularity here to take advantage of cheap options in low IV environment. Good luck Chuck! Share this post Link to post Share on other sites
Chuck451 195 Report post Posted March 12, 2014 I went ahead and put a small allocation to this trade. In the 20 straddle, March expiration @ 2.30. Share this post Link to post Share on other sites
Chuck451 195 Report post Posted March 14, 2014 To tie this up, I closed this about 11:00 yesterday at 1.15 for a 50% loss. The price was up 10% after hours, and I was hopefully this was going to be a big win. Unfortunately, the market had other ideas the next day... I had played ULTA the last cycle with a straddle through earnings for a 65% gain, but skipped it this time. Glad I did. Share this post Link to post Share on other sites
Kim 7,740 Report post Posted March 14, 2014 To tie this up, I closed this about 11:00 yesterday at 1.15 for a 50% loss. The price was up 10% after hours, and I was hopefully this was going to be a big win. Unfortunately, the market had other ideas the next day... What you can do in those cases is short the stock in AC to lock the gains (100 shares for each straddle you had). Share this post Link to post Share on other sites
