This post is restricted to paying members. To follow are specific new trade details:
Stock / Symbol: Netflix / NFLX
Option Strategy: Double Calendar
Trade entry date: 14 Jan 2020
Price at this post: $339.67
Update / Reasoning: Price wise, our trade is in a perfect spot with NFLX still trading at about the same level as our entry, right in the sweet spot. The only downside is that, rather that volatility increasing as expected, it has decreased, putting the position in the red last Friday. However, with earnings coming out tomorrow afternoon, volatility should go back up when trading resumes tomorrow. Since our trading plan was to exit the position prior to the earnings announcement, we're going to enter in our exit order at our expected / desired level to hopefully get filled right when the market opens. If we're not filled within 2 hours of trading, we'll adjust the exit order.
Trade Exit Details:
STC 1 NFLX 21Feb20 360 call
BTC 1 NFLX 24Jan20 360 call
STC 1 NFLX 21Feb20 320 put
BTC 1 NFLX 24Jan20 320 put
For a min net credit of $8.75 per contract (GTC order, limit order). Note: We're using a GTC order to ensure that the order can be executed tomorrow. As we want to be sure to exit the trade tomorrow, we may need to adjust this order during the trading day tomorrow in order to get filled.
Analysis:
Max Risk: $690
Max Reward (adjusted for current volatility level): $950 or 138% with NFLX trading at either $320 or $360 by Jan 24th
Profit Range: NFLX trading between $302 and $388 by Jan 24th
Estimated Commission (round trip): $12
Upside stop @ $365
Downside stop @ $315
