AA follow up, post-earnings decline

How to view the entire chart:


1. Try clicking on the name of the most recent article in the column on the right. This will remove the "Archives" list.
2. Try right click on the chart itself and open it on a separate window.


I am sorry that I cannot always make the chart small enough to fit neatly on the left column. I want you to be able to see the details I want to point out.


I Hope this helps,


Juan

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I had entered a trade on AA which I described in a previous article in this site:

http://stockoftheday.blogspot.com/2006/07/aa-skew-and-positive-elliott-forecast.html

Following earnings yesterday, the volatility of the stock will decline early today. Fortunately, the decline has fallen back exactly to my strike price, and actually increased my profit just a bit. However, I am not going to sit around and wait to see what effect the post-earnings period is going to have on my long options. Thus, I close the trade today at a profit of $2580. Not bad for just a few days of trading. Remember, I entered this trade because of the volatility skew. The earnings has brought the short-term IV down to the level of the long-term IV, hence I accomplished my goal: to benefit from the IV skew. Hence, I closed the trade.
If you have an Optionetics Platinum subscription, and want to see the trades described in this blog (present and past), follow the instructions for access to my shared folder:
http://stockoftheday.blogspot.com/2006/07/current-and-archived-trades.html





Here is my trade in AA, as it was entered only days ago.