- This topic has 2 replies, 1 voice, and was last updated 8 years, 11 months ago by .
Viewing 3 posts - 1 through 3 (of 3 total)
Viewing 3 posts - 1 through 3 (of 3 total)
- You must be logged in to reply to this topic.
Become a Great Options Trader
Home › Forums › Income Trades › Tiered Calendar in GMCR
Massive move in GMCR on news that Coke is increasing their stake in the company. This is on top of a good earnings reaction, and the stock has moved 30 points in about a week.
It’s overbought but the news behind it should help to provide support. I’m expecting a time based consolidation for a while.
To top it all off, the implied volatility in the stock is at year lows, so calendars are a good bet.
This is a tiered trade, which means 1/3 of the position will be put on and if needed we will add to it.
Buy to open GMCR Jun/Jul 120 put calendar for 1.90
If we see a move to 113 or 127 we will add to the trade.
113 got tagged so we are adding another round of calendars.
Buy to open GMCR Jun/Jul 110 Put Calendar @ 1.80 or lower
Another round added around 107 or 122.
Going to close it out here effectively for a scratch.
What happened her eis that the implied volatility went from 36% all the way down to 31%– meaning we made money on the time decay component but lost money on the vega risk. Butterflies would have been a better choice.