WHR - Not happy how the stock traded sharply higher this morning. This earnings season so far has been all about going long volatility vs. short. We bought May/June $100 calendar for $0.75. The trade had expanded to $1.00 on Friday, but Goldman was right suggesting their clients going long shares three days before earnings. Stock has ripped higher to $117. I am closing the calendar for average price of $0.53.
OSIS - Stock is down today despite the fact they met expectations and raised guidance. Analyst Morgan Keegan is defending the stock and suggesting this is a buying opportunity. We bought June 30/35 call spread. I am closing June $35 calls and selling May $30 calls for net credit of $0.35, thus converting the trade to May/June $30 calendar.
V - Reports earnings day after tomorrow. I have seen call buyer recently coming in at $100 through $110 strikes. I am closing the calendar for $0.75 and taking profits. I plan to come back to this after earnings but for now given how low volatility has been a buying opportunity into earnings lately, I don't want to take the same risk here. Taking profits and going home.
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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