12/21/2010 ADBE ER trade solution

Last night's ADBE ER, beat by 1 cent, with record revenue, AH jumped to a high of 32, closed at 30.66. TOday its range is at (30.28, 31.15), closed at 30.93, +1.75;
For the ER trade solutions:
Bullish:
Sell 28/27 PUT spread for 0.33; Today the close is 0.07, gain of $180 - fee.
Buy stock and sell 29 call for 1.75; the call gain 0.39; so the gain is 175-39 -fee
Bearish:
Sell 31/32 call spread for 0.27; closed at 0.35; lose of 80+fee
Short ADBE and sell 29 Put for 1.5; -175+ (150-23) = lose 45 + fee.

As the IV drop after ER, the Bearish bet loss is not as big as bullish gain.

12/20/2010 ADBE ER and previous day BIDU

ADBE would announce ER after close today, trading at 29, it's Jane 20 call/put total is 3.25, that is the TM for both side! Will watch closely the ATM TM tomorrow to see how ER affected TM. Closed at 29.17, up 0.39, its 31/32 call spread is 0.27; 28/27 Put spread is 0.33.

Four strategies comparison:
Bullish:
Sell 28/27 call spread for 0.33;
Buy stock and sell 29 call for 1.75;
Bearish:
Sell 31/32 call spread for 0.27;
Short ADBE and sell 20 Put for 1.5;

Let's see what is the best solution tomorrow.


Also interested to see OE day BIDU case, it broke ballenger squeeze and broke support at 102, and ended the OE in very low place to broke all Iron Condor trade.

12/17/2010, OE day trading

Learned more about short spread, so I decided to try it again on the OE day, as I expect the TV would drop harder after OE. I also learned that one should trade spread with 20 to 40 days before OE, so my first RIMM spread was not really a good trade by book, although it did win.

V and Master dropped a lot in previous two days due to the congress bill to limit their fee. V is approaching its previous low at $65, so I sold a bullish put spread at 65/62.5 for $700, break even 64; winning probabily 63%, ROR is 38%, V closed at 66.9, -0.29; the option loses $2.5 today.

Also RIG is approaching support at 67, did a bullish put spread at 67.5/65 for 0.74 credit, break even at 66.76; winning probability is 63.3%; ROR is 42%, RIG closed at 69.34, with 0.03 gain. the Option hard a gain of $15 today.

Inspired by Wahaa, I am going to record my recent trading here for reference. This is a great to help myself know personal strength and weak and thus improve the market and trading sense.

On Dec 14, I entered a short spread call for RIMM at 62.5/65 for $750, two day before ER. At the time, RIMM was traded at 60 to 61. I am bearish on it because of it's losing market share to apple and google, so I chose to sell spread call at above the current price of 60.5. The next day the price dropped to 59.23, and my spread gained $160. The OE day, it closed flat, after house, the ER is beating, stock price went between 58.2 to 62; It is obvious my spread hit a slam. If I did a short covered put, then I would be flat or lost money because the option could,'t be closed AH, and the next day, RIMM stays mostly above 62 in the morning.