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Great move in LNKD on earnings, but given the fact that the overall market is soft and it’s got resistance from here to 220, it’s probably going to settle in a range for a while.
IV is pretty low as we are now past earnings, so we can start an income calendar in the stock.
Buy to Open LNKD Sep/Oct 200 call calendar @3.00 or better
This is 1/3 size
Add to the trade at 190 or 212.
Looking for 20% return on risk.
W’ere at 212-ish so now’s the time to add.
Buy to open LNKD Sep/Oct 215 call calendar at 3.20.
A move to 222 or 192 puts me into the third add.
LNKD is at 220, my adjustment point is at 222 but it’s close enough, odds are it’ll get there shortly.
Time for the third round of flys:
Buy to open LNKD Sep/Oct 225 Call Calendar @3.50
If LNKD Continues to squeeze (unlikely but possible) we will sell to close the 200 calendar and buy to open something like the 230 calendar.
LNKD has reverted a bit, so we are back to break even.
Close out the Oct/Sep 200 call calendar for 2.02.
This gets us back to delta neutral, removes capital from the trade, and keeps the rest of the greeks ok.
Because the 200 calendar is so far in the money now, it’s going to be more difficult to work out of the trade as the bid ask spread is so wide. Just put some orders out and see if you can get filled.
Finally got some reversion, but now LNKD is running too fast to the downside.
We’re close enough to expiration to close it out the double calendar here:
DO NOTE: I think you could buy an Oct 215 put at 8.45 to hedge up the trade for the next 5 days, but that requires a lot more management in the trade.
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