Today the market treated my ‘normal portfolio’ very well – but punished me for branching out into a earnings play. I wouldn’t say it was mistake – It’s more fair to say it was just how a losing a earnings play looks. I took a ‘relatively huge’ loss compared to the account size and it’ll take a few months of normal returns to recover from the loss.
NVDA Earnings Loss:
When you add in the $5.18 in fees I lost around $192; that is a huge loss for a account this size. One lesson I could easily take away is that this bet should have been smaller, perhaps $2 wide. I would also note the added stress of such a active position that moves so rapidly is tiring; However I’m sure the opposite feeling when you win one makes up for that.
Opening a Iron Fly: Sold the -29 call and the -29 put, and bought the 27 put and 31 call.. $2 wide; however this time I collect $140 and my max risk is $60. The break evens can be calculated by adding $1.40 to the $29 for the upside and subtracting $1.40 from the $29 for the downside.
So the upside is $30.40 and the downside is $27.60. I’m going to manage this Iron fly at 25% of profit.
How the Macy’s Iron Fly looks:
We’ll see how that goes; it’s a bit of ‘chasing lost money’ and I need to really buckle down and focus on verticals and mechanics. These earnings plays are for the ‘big boys’ and I’m just rank amateur at best 🙂
Option Portfolio Total Positions and Greeks:
Option Portfolio Net Liquidation and Available Buying Power: