Calendars for a few low priced stocks

[SeanM]

 

 

I am out of my YELP 55 call calendar at 0.55.  I didn't like the way the spread was inching down as the morning progressed, so I decided to get out while I still had a respectable gain.  I was a little disappointed this cycle, as I hoped/expected the spread to get closer to 1.00 based on the way it performed in prior cycles.  Despite not high option volume and wider bid/ask spreads, I will say that getting fills for YELP at or a few cents away from the midpoint seems to be the norm for me in this and prior cycles.

 

I'd also like to highlight lower priced calendars for consideration in future cycles, both of which had gains that would far outweigh the commission effect of the lower cost spreads:

• TWTR 2-week 39 call calendar was at 0.25 about two weeks ago and is at 0.52 this morning for more than a 100% gain before commissions (despite the strike now being 3 points away from the stock price).  TWTR also has tight bid/ask spreads and healthy options volume so larger positions and mid-point pricing should not be an issue. 
• GPRO 2-week 52 call calendar was at 0.55 about two weeks ago and is at 1.15 this morning for more than a 100% gain before commissions.  Option volume is lighter than TWTR and bid/asks are wider, but even with some slippage this also would have been a great gain.
• I wish I was in one or both of these trades, but sadly I only tracked them.

 

 

Yowster, if you read this, are you looking at any of these again?  I know you also did a GILD calendar.  I'm about to start digging in to the current numbers, but figured I'd check to see if anyone was a step ahead of me.

 

Thanks.

[Yowster]

Sean - I actually opened a few of these yesterday, as the entry levels were similar to what I tracked last cycle:

• GPRO 2-week 45 call calendar at 0.50.
• TWTR 2-week 51 call calendar at 0.33.
• YELP 2-week 50 call calendar at 0.35.
• GILD - as per another post, this one already jumped from 0.45 to 0.70 since the latter part of last week, so I'm just watching this one for now

[equus]

TWTR around 0.38 mid, GPRO around 0.60 mid at the moment.

[equus]

Exited TWTR 51P for 0.37 (entry was 0.30). Not much left after commissions I suspect!

[Yowster]

Exited TWTR 51P for 0.37 (entry was 0.30). Not much left after commissions I suspect!

with standard IB commissions, that return should be around 12% - lower than what we shoot for with a calendar, but still not bad.

[SeanM]

Exited TWTR 51P for 0.37 (entry was 0.30). Not much left after commissions I suspect!

 

Similar outcome here.  Entered 52C at $0.33, exited this morning at $0.40.  11.7% gain after commissions.

 

Trying to get out of GPRO even marginally in the black now . . .

[4REAL]

What's up with TWTR

IV of short leg collapsed

[4REAL]

had a limit @ .48 for 50C 2week, was executed @ .64

[luxmon]

Earnings leaked via a tweet, how fitting lol.

[4REAL]

wow, closed just in time

TWTR halted

Edited April 28, 2015 by 4REAL

[luxmon]

Official announcement made:

 

https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=909177

[Yowster]

TWTR, GPRO, YELP(so far) all disappointing this cycle:

• TWTR - resumed and down over $10 per share!  Lucky I got out shortly after 3:00 for a small gain before the earnings leak.
• GPRO - managed to get out with a 1% gain after commissions.
• YELP - trade is down so far.  The 0.35 price on the 50 call calendar looked good at the time, but when the price dropped I bought an equal number of 51 call calendars at 0.25.  We'll see what happens tomorrow with this one.
• GILD - bypassed since it jumped from 0.45 to 0.70 since I started tracking, but the mid is over 0.90 now!  I guess 0.70 wasn't too higher after all.

Edited April 28, 2015 by Yowster

[Kim]

GILD is probably the one to consider next cycle.

[4REAL]

closed YELP around BE, (after comm about 6% loss)

[Yowster]

Out of YELP too, very disappointing this cycle.  My loss was bigger as my 50 call calendars that I bought for 0.35 were closed for 0.22, my 51 call calendars were break-even. 

[SeanM]

Disappointing, but I don't think the trades should be abandoned in the future.  Felt like there was a decent margin of safety (assuming all were out before the TWTR leak).  For the three trades cumulatively, my after commission loss was 2.2%.

[Yowster]

Disappointing, but I don't think the trades should be abandoned in the future.  Felt like there was a decent margin of safety (assuming all were out before the TWTR leak).  For the three trades cumulatively, my after commission loss was 2.2%.

Yup, I totally agree.  By using prior cycle data to enter trades at what appears to be good prices, I believe we can limit downside risk in most cases (barring huge stock moves of course) - and it most cases make a decent profit.  I'm not one to shy away from the low priced calendars just because of commissions - if the past data shows a chance of a big percentage gain and the options have good volume/liquidity.