KSS Earnings Play

11/12/13 -Closed

KSS reports earnings on 11/14 before market open. The IV Rank is over 90% and the expected move of +/-2.83 by expiration is represented on the risk profile below. As you can see the break-even price levels are outside the expected move. NOV option vol should contract from 59% down to 28%.

• Iron Condor, KSS @57.33
• STO Nov 60 C (75% OTM)
• BTO Nov 62.5 C
• STO Nov 55 P (75% OTM)
• BTO Nov 52.5 P
• Credit = 0.72
• Risk = 178
• ROR = 40%
• BE = 54.28, 60.72

Update: 11/14/13

KSS opened -$4.65, ouch. Roll the puts and let the calls expire.

• Roll, KSS @54.18
• STO Dec 55/52.5P Nov 55/52.5P
• Credit = .17

Update: 12/18/13

• BTC Dec 55/52.5P @0.59
• Net = $30
• ROR = 17% in 36 days