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Showing content with the highest reputation on 10/10/2014 in all areas

  1. 1 point
    The stock will have to be well above $110 to get assigned on your options. I've found that options will generally be assigned only when there is no more time premium built into the option price (its all intrinsic value), and it GPRO's case, its an extremely high IV stock so you'll have to be much more than $5 into the money for the option to be priced at just its intrinsic value. Another type of trade for GPRO to consider that works well for high IV stocks in a general uptrend is to take advantage of the high IV and sell weekly calls against long options that still have a month or two before expiration (I've done this for GPRO and MBLY over the last month or so). You can either buy OTM call calendars and continue to roll the weeklies until it gets close to your strike price. Or buy longer dated ITM calls and sell weekly ATM (or slightly OTM) calls against them - in this case you would roll the weeklies if they could be bought back for less than what you sold them for, or roll the whole diagonal spread at a profit to higher strikes if the stock moves significantly higher than your short strike. Both these methods will lose some money if the stock drops by more than the premium you are collecting in your short legs.
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