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http://www.pathometrix.com/Movies/ADBE.mov
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3 comments:
Juan,
Would you reckon on a strike of $40, with the front month of Feb06 and the back month of Apr06 the correct entry for a PCCRC on ADBE right now?
Make sure that ADBE is an appropriate candidate as far as IV skew is concerned. I entered this trade back in Dec. and the skew is different now. The Volatility has picked up since.
I wanted to show it as an example of how you make money with Theta and Vega alone, without changes in Delta. One more way the PCCRC makes money.
Notice how the APR options are higher in IV than the Feb. So you may need to go further back. Check April and compare with say July. Check also the date of earnings. It is always nice if the expiration is due to occur after the earnings. That alone may be the reason why some options are more expensive than others.
You want to BUY LOW and SELL HIGH ---- VOLATILITY!
Juan,
RE: "You want to BUY LOW and SELL HIGH ---- VOLATILITY!"
Of course, but I have taken a rest from Platinum. **Smiles**
GOOG. Using the $390 strike, if the PCCRC Mar06 - Feb06 at had been bought yesterday, the day following the earnings announcement and the enormous move, it would have cost $70 approx. Today it would have cost $64. Which has got me thinking, does this generally happen time?
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