Hi fellow traders. Several of our subscribers have been asking us to share information regarding our current trades. So, here is a trade that we entered into yesterday in which we sold the $120 puts on VMW. Earnings will be announced on 11/30/2017.
Notice on the chart shown below that implied volatility (IV) is very high and that means we want to "sell" puts at this time. [IH Tip: when IV is high, you sell options and when IV is low, you buy options]. IV is the green line that is shown near the top of the chart.
Since the IV is very high on VMW, and the earnings is this week, yesterday we sold the $120 puts which will expire on Friday, after the earnings announcement which is on Thursday.
IH plan: on Friday, we will either buy back our puts at a lower price or allow the stock to be put to us depending on the opening prices on Friday morning. If the stock is put to us, we will sell calls on Monday (covered calls) expiring next Friday and continue to generate premium until the stock is called away from us. A win-win for us, especially since we don't mind owning VMW.
Good Luck to everyone, but remember to do your own research before entering a trade,
Trader_Joe
Notice on the chart shown below that implied volatility (IV) is very high and that means we want to "sell" puts at this time. [IH Tip: when IV is high, you sell options and when IV is low, you buy options]. IV is the green line that is shown near the top of the chart.
Since the IV is very high on VMW, and the earnings is this week, yesterday we sold the $120 puts which will expire on Friday, after the earnings announcement which is on Thursday.
IH plan: on Friday, we will either buy back our puts at a lower price or allow the stock to be put to us depending on the opening prices on Friday morning. If the stock is put to us, we will sell calls on Monday (covered calls) expiring next Friday and continue to generate premium until the stock is called away from us. A win-win for us, especially since we don't mind owning VMW.
Good Luck to everyone, but remember to do your own research before entering a trade,
Trader_Joe
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