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NKE

TRADE IDEA: NKE APRIL 1ST 60/70 SHORT STRANGLEHere are the metrics for the setup: Probability of Profit: 73% Max Profit: $100/contract Buying Power Effect/Risk: $846/contract; Undefined Risk Break Evens: 59/71 Alternative: April 15th 56.5/60/69/72.5 iron condor Probability of Profit: 61% Max Profit: $100/contract Buying Power Effect/Risk: $250/contract; Defined Risk Break Evens: 59/70 Notes: As you can see, there are pros and cons to the short strangle versus the iron condor. The short strangle has a higher probability of profit, but requires more buying power and the risk is undefined. The iron condor has a fairly nice defined risk buying power metric of $250/contract, but the probability of profit is less (and I had to go farther out in time in order to get decent long options; the longs in the April 1st expiration at basically the same strikes were "no bid" on one side or the other ... ). The break evens of both setups are nearly identical, however.
NYSE:NKE
by NaughtyPines
WHAT I'M LOOKING AT FOR THIS COMING WEEKWith the VIX at sub-15 levels, premium selling plays are hard to come by, so I can either resort to low volatility strategies (calendars, diagonals), look to go "long volatility," or search for "diamonds in the ruff" for premium selling. Since I not a rabid low vol strategy player, I'm going to look at seeking out what limited short volatility plays there are or go long volatility, assuming an ideal setup presents itself. Currently, the sole individual underlying that I would sell premium in and that is not an earnings play is EWZ, since it still has an implied volatility rank of +70. Naturally, there are other underlyings with +70 implied vol rank, but they're just too low in price to get significant premium out of (e.g., PBR, which has a rank of 84). Unfortunately, I already have a play on in EWZ and don't like doubling up on plays just because there's nothing else out there. However, there are a couple of earnings announcements that are giving me that "come hither" look: NKE, which announces on Tuesday after market close and GME, which announces on Thursday after market. They're not looking especially great right now (each bringing in about a .70 ($70) credit for the 70% probability of profit short strangle setup (I generally like to see a 1.00 ($100) credit out of these), but they're worth keeping an eye on in the event that they get "frisky" right before earnings. The other thing I have my eyes peeled for is further weakness in the VIX with my "dream" price somewhere around 12. See my VIX post for what I'm looking at to play either VIX, VXX, or UVXY long ... .
NYSE:NKE
by NaughtyPines