I nibbled on this trade. Sold UPST July 29 $27 calls for $0.68 and the July 29 $23.50 puts for $0.92.
That is $1.60 a share. Break even on the call is %28.60 and for the put is $21.90.
KC
I have no idea why, but my spidey sense says a good chance this week is notable.
Got some ERs on big names. Some economic data.
Maybe i will be back in market for trades by eow.
Will see!
Dreamer
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Seems certain that there will be market-moving news this week. As far as UPST and the puts and calls are concerned, should expect multiples of the market movesâand monster moves on puts and calls.
For anyone keeping score at home, UPST was about $25 when I sold the options. Closed at $24.60 and eased to $24.50 after hours. The puts closed at $0.95, up $0.13. The calls closed at $0.45, down $ 0.23. Since I am short both, up is down and down is up, and I âmadeâ $0.22 a share. Just noise, of course as for the day (I bought during the session so mine is different), the puts are up 28.7% (bad) and the calls are down 60.8% (good). Another 1$ down on UPST and I own more shares. $27 seems quite distant at the moment so not concernedâhowever I would like the shares to be called away at around $27 as I have a trading position purchased at $26. If UPST ârocketedâ to $30, I would sell more as I would like to reduce my holding by 40% by August 7.
Clear? There will be pop quiz at any moment. And you will need to show your work (I never promised that there would be no math, so quit whiningâthat means you, too, in the back row, Dreamer).
KC is 55% cash. Had a crap ton of options expire last week. Only 1/5 as many this week, and split between puts and calls. So in best of all worlds, I would make only 0.78% of port value this week.
KC
First, a correction. Old eyes. Sold those puts for $0.82 not $0.92,
Calls closed at $0.13, Puts closed at $1.71. Down $0.89 on puts, up $0.55 on calls. If they expired today I would pocket the $0.68 on the calls and buy UPST at $23.50. UPST closed at $22.66 so down $0.86. Down $0.04 on the shares but+$0.68 on the calls so still above break even.
Carnage in the market.
% cash keeps increasing 
Dreamer in the UPST buggy. Welcome aboard.
KC
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Down $0.04 on the shares but+$0.68 on the calls so still above break even.
Err, Down $0.94 on shares. Received $0.82 for the puts so down $0.12. I think. Got $0.68 for the calls so still above breakeven. I think. I think I should stay away from puts and calls. Whoever gave the previous a rec, get yourself to study hall. I think.
You think these posts are a wreck, you should see the septic tank that is being built. Gotta go see whatâs happening post morning break time.
KC
You are complicating this too much. You sold a put and a call, taking in $1.50 in premium. To buy them back at yesterdayâs close you would have to spend $1.84. You lost $0.34 up to now on the whole adventure. The new stock from possible assignment doesnât come in to play yet.
KC,
Champâs board is unique because it is a smart, pleasant and funny board.
This is probably why you got the rec.
You should post more often, really!
You are complicating this too much. You sold a put and a call, taking in $1.50 in premium. To buy them back at yesterdayâs close you would have to spend $1.84. You lost $0.34 up to now on the whole adventure. The new stock from possible assignment doesnât come in to play yet.
I canât say you are wrong, as this represents the actual accounting that the brokerage does. But it does ignore the elephant in the room, which is the assignment. Thatâs like telling the man on death row that Fridayâs execution isnât âin play yetâ.
The other perspective is as I stated in one of the first posts on this thread, that there will be a lot of noise in the data during the week that doesnât mean much. The devil in the details is that the price of the options that expire in a week or less, is initially, mostly, time premium that is decaying rapidly. Hourly. 13 market hours to go right now. The price of the options is entirely time premium which totals $0.72. Only thing guaranteed is that the premium will decay to zero, Friday at 4 p.m. EDT.
The meaningful question is, and has been, what will the UPST price be at market close on Friday. The rest, including the current price of UPST, is noise, but interesting noise in the case of UPST share price.
Right now UPST is in the sweet spot(s), at $24.77. Nicely between the $23.50 put and the $27 call. All because Mr. Market decided that UPST is worth 9.3% more today than yesterday. Dreamer, did you take profit? Ooops, I have 9 minutes to see if I want to sell any shares.
KC
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UPST still in the sweet zone, closed at $24.37 and sitting at $24.85 at end of after hours session. I did sell some shares AH on 27th but missed the opportunity to buy back $1 cheaper yesterday. I am torn between making those micro profits and wanting to reduce holdings before earnings.
E*Trade had a feature that uses put/call data to predict the price reaction post earnings. That is, a prediction on the size of the post earning price reaction, not the direction. The last 4 quarters, the predictions were 11%, 13%, 22%, and 23%. Current prediction is 22%. The actual moves were quite a bit larger at +26.2%, -18.2%, +35.7% and -56.4%. I am unwilling to risk 22% or more down which is why I want to reduce holding to half of my target.
Meanwhile, at Thursdayâs opening, UPST was down a fair amount and the July 29 $23.50 put was at $0.72 (versus my $0.82 sell on Monday). I decided to double the put exposure, possibility of $0.72 in two sessions.
We shall see.
KC
Puts and calls expired worthless so I pocketed the premiums. I will expand the exposure next week. But considering that UPST reports AMC on the 8th, I will spread the exposure by adding AFRM. The options for DDOG and others look good but they have earning reports during the week so hands off.
In following weeks I will spread to other stocks.
KC