Home › Forums › Open Trades › PEAD Long in BABA
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August 21, 2016 at 10:36 pm #6792Steven PlaceKeymaster
Setup: PEAD (Post Earnings Announcement Drift)
Price: 97.15
Description:
Decent gap up on earnings, then the stock had a monster second day play. Stock has now spent a week rangebound, and it will probably see continuation higher. 100 is a big psychological magnet so expect it to run there.
I’m looking for a 30 minute close above 97.15. My weapon of choice is the October 100 calls. If you want to be more conservative, play the Oct 95/105 call spread.
TIGHT STOPS ON THIS. 30 min close under 96. This could be a trade where I’m stopped out 3 times before it works, but I’m ok with that.
Attachments:
You must be logged in to view attached files.August 30, 2016 at 9:37 am #6862Steven PlaceKeymasterResistance cleared, here’s the trade:
IWO Premium Order Ticket Type Asset Duration Strike C/P BTO BABA 21 Oct 16 100 Call Total Debit: 1.95 Stop out on a close under 93
September 1, 2016 at 12:32 pm #6877Steven PlaceKeymasterBABA is hitting my first target/resistance level so I’m going to sell half.
IWO Premium Order Ticket Type Asset Duration Strike C/P STC HALF BABA 21 Oct 16 100 Call Total Credit: 2.60 - This reply was modified 6 years, 8 months ago by Steven Place.
September 6, 2016 at 10:08 am #6904Steven PlaceKeymasterSeeing a really nice stretch here, going to sell some calls and roll this trade into a spread.
So currently the only trade is the long Oct 100 call… we will sell the Oct 110 call against the position and convert it into a bull call spread.
IWO Premium Order Ticket Type Asset Duration Strike C/P STO BABA 21 Oct 16 110 Call Total Credit: 1.52 This reduces delta and theta while still keeping us in the trade.
September 28, 2016 at 10:22 am #7039Steven PlaceKeymasterOk so we’re going to do a cal-vert stairstep.
What that means is… we currently have on a bull call spread and we’re going to roll the long option up and out to convert it to a calendar.
This will basically iliminate all risk in the trade, cut our delta down, and give us an opportunity to stick around in the trade as we head into earnings.
So as it stands.
We entered the Oct 100 calls at a basis of 1.95
We sold half at 2.60
And then we sold the Oct 110 calls at 1.52
So we are going to SELL TO CLOSE the Oct 100 calls and BUY TO OPEN the Nov 110 calls.
That way we will have an Oct/Nov 110 call calendar.
To “roll” this trade, we will use a diagonal spread.
IWO Premium Order Ticket Type Asset Duration Strike C/P STC BABA 21 Oct 16 100 Call BTO BABA 18 Nov 16 110 Call Total Credit: 3.6 - This reply was modified 6 years, 8 months ago by Steven Place. Reason: changed ticker on order ticket
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