Thru-Erarnings Straddle - KKD

[Guest]

For the last 4 cycles, straddles for KKD have paid off thru earnings.  I played this last cycle with a small allocation, and closed just after opening for a 24% gain, and if I held on to it near closing I could have gotten over 60%.

 

What do you think? 

Edited March 10, 2014 by Chuck451

[Guest]

For the last 4 cycles, straddles for KKD have paid off thru earnings.  I played this last cycle with a small allocation, and closed just after opening for a 24% gain, and if I held on to it near closing I could have gotten over 60%.

 

What do you think? 

 

Chuck,

On the last earnings date (Dec 2), KKD dropped 16% in after hours trading after reporting earnings, and it closed down 20% at the end of the day.  This is a huge move and larger than the 12.5% implied move.  Was this really profitable?  Can you tell us more about the trade?

 

Kim,

Why do you think this looks good?

[Guest]

oops, I thought he said calendar, not straddle.  sorry.

[Guest]

It looks like through-earning plays are gaining some popularity here to take advantage of cheap options in low IV environment. Good luck Chuck!

[Guest]

I went ahead and put a small allocation to this trade.  In the 20 straddle, March expiration @ 2.30.

[Guest]

To tie this up, I closed this about 11:00 yesterday at 1.15 for a 50% loss.  The price was up 10% after hours, and I was hopefully this was going to be a big win.  Unfortunately, the market had other ideas the next day... 

 

I had played ULTA the last cycle with a straddle through earnings for a 65% gain, but skipped it this time.  Glad I did.