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With 3 days left, the premiums are still huge, earnings today.
57 centswith a whisper number of 59 cents and revenues of $9.23 Billion. Blow out and the stock may be off to the races.
Yeah, I've been trying to make some safer trades that I wont lose sleep over.. This is one of those.
Nothing like the time I had so many options on GM, that if they would have filed bk 30 days earlier than they did, I would have owned 2% of the company.. that one should have had me in the hospital with ulsers.. haha
It doesn't allow..so basically I can't do spreads unless I have 1000 shares as collateral.
I guess, I am going to spend next few months just doing covered calls, which is ok I think, given my options trading experience is very less.
If you had 1000 Oracle and then bought the March $30 call and sold the $33 call, then that is what they will allow you.
But, what they overlook is the $30-$33 spread is only a $1.00 risk to you.
You'd buy the $30 call for $1.44 and sell the March $33 call for 50 cents so your maximum risk is actually 94 cents (real time prices) or $940 on 10 contracts.
So, if they let you buy 1000 Oracle to be able to do the above, they are actually increasing your risk. The spread has a maximum loss of $920, and a maximum gain of $3000.
BUT, those 1000 shares you bought could go to $20.
They'll let you lose $9000 on the stock, but not risk $920 on a spread.
If you had 1000 Oracle and then bought the March $30 call and sold the $33 call, then that is what they will allow you.
But, what they overlook is the $30-$33 spread is only a $1.00 risk to you.
You'd buy the $30 call for $1.44 and sell the March $33 call for 50 cents so your maximum risk is actually 94 cents (real time prices) or $940 on 10 contracts.
So, if they let you buy 1000 Oracle to be able to do the above, they are actually increasing your risk. The spread has a maximum loss of $920, and a maximum gain of $3000.
BUT, those 1000 shares you bought could go to $20.
They'll let you lose $9000 on the stock, but not risk $920 on a spread.
Actually the March $30 call on Oracle is not that expensive.
$1.36
If someone could sell a covered weekly $30 call, they could get 33 cents.
If Oracle stays below $30 by 4pm Friday,
then in the span of 3 days you would have recovered 24% of your cost. (33 cents / $1.36 = 24%) With 13 weeks left to go, to sell weekly options.
And the stock is $28.93, so for it to stay under $30, by this Friday is not so much of a stretch.
I've almost talked myself into investing $1.03 in a March $30 - Weekly $30 spread. Go Oracle.
Actually the March $30 call on Oracle is not that expensive.
$1.36
If someone could sell a covered weekly $30 call, they could get 33 cents.
If Oracle stays below $30 by 4pm Friday,
then in the span of 3 days you would have recovered 24% of your cost. (33 cents / $1.36 = 24%) With 13 weeks left to go, to sell weekly options.
And the stock is $28.93, so for it to stay under $30, by this Friday is not so much of a stretch.
I've almost talked myself into investing $1.03 in a March $30 - Weekly $30 spread. Go Oracle.
Dec 23rd $30 call is 38cents.
I have a feeling that it will pop to $31 by friday.
I have a feeling that it will pop to $31 by friday.
Yes, the stock has gone up so it is 38 cents.
Well, even if it went up to $31, or slightly under that, the weekly $30 could be rolled out, or just close the entire spread.
The March $30 call is $1.41.
The stock is around $29.00.
To estimate how high the March $30 call would go, if the stock went to $31, just look at the March $28 call.
If the stock goes from $29 to $31, then the March $30 should be worth about what the current $28 call is worth which is $2.49.
So, a $2 move in the stock, ($31 - $29) but the March $30 only goes up about 1/2 that ($2.49 - $1.41)
Once the March $30 gets into the money, (stock above $30) the amount of time value priced in, goes down. And some volatility is lost, since the earnings are out, and the "event" is over.
If you had been aggressive you could have sold the weekly $29.00 call.
I did nothing. However, yesterday when the stock was $28.52, I was ready to buy at $28.45. I think I would have sold today. I look for quick trades.
The earnings and revenues both missed.
This should shape the way the stock trades the next 3 months, until, once again, it is time to report their numbers.
So, any big moves up, may need to be sold, and any moves down might be able to be bought. Just before the close, an analyst on CNBC said there was a negative convergence on the Oracle chart. If the stock broke $24.70 it was headed to $15.00.
It should take a big market move down to get Oracle under $25.00.
I'd buy some at $25.00 and sell the $25 calls.
Too late to buy puts.
Sell calls to get out of a mistake, if in fact, you think you made a mistake.
You may be able to get slightly over $1.25 tomorrow on the Jan. $27 call.
Since you paid just over $29.00, that would leave you about $1.00 in the hole. So, for the time being, you are a long term holder of Oracle and must sell covered calls to get out of the mistake, if it was a mistake.
If you had been aggressive you could have sold the weekly $29.00 call.
I did nothing. However, yesterday when the stock was $28.52, I was ready to buy at $28.45. I think I would have sold today. I look for quick trades.
The earnings and revenues both missed.
This should shape the way the stock trades the next 3 months, until, once again, it is time to report their numbers.
So, any big moves up, may need to be sold, and any moves down might be able to be bought. Just before the close, an analyst on CNBC said there was a negative convergence on the Oracle chart. If the stock broke $24.70 it was headed to $15.00.
It should take a big market move down to get Oracle under $25.00.
I'd buy some at $25.00 and sell the $25 calls.
Too late to buy puts.
Sell calls to get out of a mistake, if in fact, you think you made a mistake.
You may be able to get slightly over $1.25 tomorrow on the Jan. $27 call.
Since you paid just over $29.00, that would leave you about $1.00 in the hole. So, for the time being, you are a long term holder of Oracle and must sell covered calls to get out of the mistake, if it was a mistake.
I think I will wait this week and make a call next week. This may be a knee jerk reaction from the speculators.
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