TWTR loss (-$4800) - Debriefing notes?
Sell to Open Oct 31st 51 strike call
Buy to Open Oct 31st 53 Strike call
Sell to Open Oct 31st 47.5 strike put
Buy to Open Oct 31st 45.5 Strike put
the two short legs (the ones sell to open) are the parameters
if Twitter stays between 47.5 and 51$ by Friday
its +15400 $
if it goes outside the two long legs (Buy to open) than its max loss -4800
risk 4800 to make 15400
Hi, CostaKapo,
I thought you would have provided a follow-up on your plays like w AMZN and TWTR.
As you presented the TWTR Iron Condor trade, the TWTR post-earnings impact resulted in a BIG downside move for TWTR well outside of your Iron Condor strikes.
I am assuming you had to suffer thru the LOSS of (-$4800) on this trade. Correct?
However, all is not "lost" - there is always something to Debrief and hunt after positive beneficial Lesson(s) Learned items.
For example, with regards to your use of Iron Condors especially around earnings plays, normally there is one KEY PROCEDURAL RESEARCH STEP that you must and should have done with the TWTR earnings setup. :idea:
Interested? This is how professional volatility and credit players would have looked into your TWTR Iron Condor setup.
Lesson(s) Learned for TWTR Iron Condor:
1. Study the immediate past 3-5 post-earnings price action - and really "SEE" and measure the price volatility immediately after earnings report, and then price volatility at the Expiry Friday post-earnings. :smart:
2. With TWTR for example, you can easily see that for the past recent TWTR earnings week, the TWTR price action easily "deviated" away by > (9%) from the Closing price immediately prior to earnings report release.
:smart:
3. Hence, any Iron Condor with strikes set < (9%) as it "borders" will easily yield Max Loss results.
Do you understand, CostaKapo? The IC strategy is a solid robust strategy and does maximize some options properties. However, it is truly a volatility strategy - and so your "research" and "back-testing" of that IC earnings strategy should always include at least the immediate most recent 3-4 past earnings price action results.
:idea:
I hope this will help you to better apply Iron Condor strategies in/around earnings dates.
Also - another low-risk/high-return strategy play can be to set up "profit traps" to capture moves > (+/-8%) for example, like long strangle/short strangle strategies. :idea:
CostaKapo - most importantly, if you enjoy sharing your ideas and trading campaigns for Trade Entry setups and pricings - please try to also share the Closed Trade results (wins and losses both). This is how the T2W traders/readers can best LEARN from your ideas and trading initiatives! :smart:
Finally - make it a habit to DEBRIEF your Closed Trades (both wins, losses). It will help train/shift your mindset, and condition, and reinforce - that there always Lesson(s) Learned from unfavorable trading results!
Thanks again for all of your time and input - keep it up! I enjoy reading your trades and ideas (esp since not too many serious options traders around here)! :clap:
Best regards,
WklyOptions
