Options Portfolio Update: First Earnings Trade, First $3 Wide Strikes, Second Iron Condor

The market opened and stayed up eighty percent  of the day then as it seems to have done the last part of the day it reverses itself and ends up about unchanged. This kind of cyclical and closing unchanged market could be a contributing factor to the current low level of volatility in the market.

market overview 5-9-17

My First Earnings Play:
Today I opened the following Iron Condor. A Iron Condor sets a floor and ceiling price level and when selling you would want the underlying to stay in that price channel. I opened a IC using $3 wide strikes and played the strikes just inside the expected move on both the upside and downside. 

Iron Condor Earnings Play 5-9-17

The break evens are $114.04 to the upside and $94.96 to the downside. The price of Nvidia  at the time of this trade was $103.91. I was able to collect $104 and these contracts expire on Friday, in 3 days.

Credit Collected: $104
Max Loss: $196  (buying power reduction).
Delta: (-0.36)

NVDA - Options - Iron Condor 5-9-17

The orange bar shows the expected movement. After hours NVDA released their earnings report; They beat estimates in almost all categories. Their stocked jumped and at one point they blew past both my upper limit calls. If they open there in the morning then I’m looking at a max loss of $196. However as of now 7:13pm CST, it seems I will have a chance at opening to make a small profit.

nvda - after hours stock prices

If the stock opens at the current after hours price of $113.76; Here is what I think will happen.

The Calls: The call side will have been tested and breached at $113; However since I collected $1.04 technically my upside break even is $114.04. I sold this position for a $47 premium. I expect the cost to by it back will close to $76 – Leaving the call side a net loss of $29 … This is my educated guess at what a perfect market would do – likely since there is 3 days left in the trade and it was recently $4 higher there will be people holding out for a bounce tomorrow.

The Puts: The put side paid $57 in premium and I don’t think there are that many bears holding unto such deep out of the money puts; I should be able to buy back the put I sold very cheap. I’m hoping to make as much as $50 on this trade.

The above scenario would net me a $21 profit – $5.16 fees; $14.84 Profit.

$14.84 would be a 7.5% return over buying power reduction  in 2 days. I’ll update how it goes tomorrow 🙂

I’m going to have a order on to buy back the Iron Condor for $83. I’ll wake up and see where it might be trading – based on the underlying pre-market tradingat 8am.

Portfolio Positions:
option portfolio account positions 5-9-17

Option Portfolio: Net Liquidation and Available Buying Power

net liquidation and available buying power 5-9-17