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WFC at 49.27
I’m going to set up a bearish bet for earnings:
Buying 29APR 49 PUT (IV 40%)
Selling 14APR 47 PUT (IV 43%)Selling a higher IV due to earnings.
If the stock trades lower after earnings, front month IV will collapse faster than the backmonth IV and this should help from IV standpoint.
On a move lower, we have short delta and this should help this trade too.
If the stock trades higher, IV on the frontmonth will collapse anyway and the back month will get hit too with only 2 weeks left until expiration (after earnings are out).
There will be too little time to save the remaining long put, so planning for a full loss is recommended.
Chart:
Order Ticket:
Risk Profile:
WFC at 48.11
This trade is working in our favor and I’m looking for a way to reduce risk and remain in the trade.
I’m rolling short 47 put up to 48 strike for a 0.40 credit
Order Ticket:
Risk Profile:
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