9Feb - again I don't follow GS so final update on this, im sure you get the drift of the previous notes. the takeaway from this if you followed Dan and Bonawyn is take some profits along the way, at least get your initial investment back since as of right now the stock is 238 and the spread is $5.55 at midpoint after hours. the decay is starting to work against you now. Ive been more successful recently by taking profits sooner for 25-50% winners vs looking for home runs. Good trade by Dan and B , my paper trade alternative as well. hope you rung the register as some point, take your lady to dinner, move on to the next one
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12Jan- if I followed GS I would have adjusted this paper trade on Friday opex so I will go with some after hours pricing so assume some slippage. stock at 242.11 :
Dan/Fresh Meat Bonawyn trade - Mar240/270 call spread - entry 4.60 debit, current value $9.20 midpoint . nice gain so far. if you followed and have multiple lots Id recommend you sell enough to make back your initial investment and let the rest go thru earnings.
Mark Lexus alternative - assuming I rolled the Jan10 240 perfectly at $2.11 (242.11 stock price - 240call) and rolled to the Jan 240 (Jan240 price at $5.20 - the 2.11) = $3.09 credit.. the new Jan240/Mar240 spread is valued at $4.90 +the 3.09 credit = $7.99
lets see how earnings shape up
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5Jan- update to this using after hour midpoint pricing with stock at 231:
Dan / Fresh Meat Bonawyn trade - Mar 240/270 call spread - entry $4.60 debit, current value $4.97 midpoint
Mark Lexus alternative - Buy Mar 240/Sell Jan10 240 - entry $4.32, current value $5.17 midpoint. going forward let the Jan 10 240 expire worthless this week and day prior to earnings sell the Jan240 call
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22Dec - have to say this trade had me giving it a hard pass right away. not exactly risk less make more. Dan Nathan and Fresh Meat Bonawyn Eison for the setup. Can someone get with Bonawyn and get him into the 21st century to get a twitter account. as I type the stock is at 228ish. the boys are recommending buying the Mar 240 call for $5.03 and sell the 270call for .43 for a $4.60debit.
first thing im not liking is selling that upside call for only .43. for 43 cents might as well just buy the 240 call outright, not mitigating the cost of the spread by much. I don't like laying out so much cash on a directional bet. Instead if you are going to buy that Mar240 call (assuming you are buying March to "give it time to work", make is a calendar spread. earnings are Jan15, you can sell the Jan10 240 call for about .55 credit... you are collecting more than that 270call right there. let that call expire and let the IV increase up until earnings and then sell the Jan 240 call (that's going for $1.45ish now).. the goal if you are determined to buy that 240 call to at least work down the cost basis.
Sell Jan 10 240 call at .53 credit
Buy Mar 240 call (priced at $4.85 now for debit) = $4.32 debit
Can repeat the short 240 sales after the Jan opex if you are going to hold the march call
here is the Options Action clip:
GS Trade
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