CLOSING the $FB Options Action trade - Dan

27july  - dan closing this trade per tweet and on his site, here is his post at riskreversal FB comments .. had the direction correct, stock shot past it.. i still say if you would have waited till same day to enter trade with same thesis but using the strikes at that time would have giving you better result. closed the calender spread at .15 for .25 loss.  at least defined the risk and kept it small. here are all of dans on-air trade in a google docs spreadsheet

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26july - some followup comments to this trade... facebook reporting earnings today.its a good example of what i repeatedly say about waiting till right before earnings to put on a trade if you are going to play earnings. although the optionsaction show airs once a week, putting on a calender spread days ahead of the earnings date will often work against you since the strike you are hoping the stock moves to (the 27strike in this case) might hit before the event.. so your thesis may change..ZNGA dissappointed yesterday, so facebook drops 2bucks, now its hovering near 27ish.. now instead of expecting "a bit of a downside move" , you will need a "no-move" on earnings for your trade... so many times you are better off waiting till the day of the earnings to base your strategy on the stock price AT THATTIME vs 3-4 days prior and 10% higher.

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20july - dan has a trade on this weeks show for Facebook earnings which is on thursday.. here is the video clip facebook clip .. look at about 2:29 of it when dan announces his trade...look at the look on Brian Sullivans face.. A CALENDER SPREAD???? duh??? im on options action and i dont know what a calender spread is.. what an ass clown.. dan has to keep from laughing as he starts to discuss the trade. anyway.. dan has a put calender for facebook earnings, the July weekly / august 27 put calender:

Sell the July weekly 27 put
Buy the Aug 27 put -- all for .45 debit per 1 lot.. so a 10 lot for $450

i like this trade and was looking at it at lunchtime.. dan's thesis is well thought out.. might be doing this trade.. only thing i would add is that since earnings are thursday i would not put this on first thing monday mornings but would wait till thursday (if it reports after the close) to put this on since the stock could move a bit in either direction during the first part of the week. will base my strike selection on where the stock is at that time. see all of dans on-air trades in this google docs spreadsheet

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