10/2/13
Today was our first meeting of the Humpday Traders.
This first trade started with a recommendation from Dinger.
PCLN @ 1067.00
STO NOV 1205 CALLS for a nice credit.
If you can't go naked or don't want to....you could consider:
STO NOV 1205 C and BTO NOV 1220 C for a solid credit.
After looking at the chart, we see that the current IV percentile is 50% compared to the past year, 77% for the past 4 months, and 100% for the past month. As a side note, TastyTrade is now referring to 'current IV percentile' as 'IV rank' in order to avoid the confusion with current IV. With the monthly IV rank at 100% we can cash in on the high premiums by add a credit Put spread to Dinger's Call spread to create an Iron Condor. The high IV rank also allows us to move farther OTM to the 90% strikes. This morning with PCLN @ 1056 I placed an order to sell an IC for $1.70.
- Iron Condor, PCLN @ 1056
- STO -1 Nov 1210 C
- BTO +1 Nov 1220 C
- STO -1 Nov 895 P
- BTO +1 Nov 885 P
- Credit = 1.70
- Risk = 830
- ROR = 170 / 830 = 20%
