LMT - On March 26, we went long June $90 calls for $1.10 following the unusual option activity. Here is the link: LMT Trade. The stock has done little since then and those calls are going for $0.90.
LMT will report earnings tomorrow before market opens. I am selling May $90 calls for $0.55 credit. This converts the trade into June/May $90 calendar and brings the cost down 50% from $1.10 to $0.55.
RIMM - On Feb 26, we bought June 75/85 call spread for $2.70. After earnings release, we bought back June $85 calls and sold front month April $75 for net debit of $0.15. This increased the cost to $2.85 but it was the right thing to do given Theta decay for April options.
With April expiration behind us, it is time to sell May $75 calls. I just filled the order for $1.32 credit. Now we own June/May $75 call calendar for adjusted price of $1.53.
Good luck!
About Me
- Fahad Khalid
- Chicago, IL, United States
- I have Masters in Business (Accounting and Finance 2003) from Michigan State University. I have been trading the market since 1998. Prior to picking up trading as a full-time career in 2008, I was a management consultant at Alvarez & Marsal and Conway MacKenzie for four years. I provided turnaround, crisis management and restructuring services to financially distressed firms. Prior to working in turnaround, I worked in Audit & Assurance at Deloitte & Touche for two years. Trading in the market has always remained my side business ever since I started college. 90% of the time, I trade through options. I love volatility skews and positive Theta plays. While I make a lot of directional bets, in general my favorites are to take advantage of high implied volatilities through calendar or butterfly spreads and vertical credit spreads. I never buy straight calls or puts and I do a lot of exotic multi-leg option trades.
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