Talking Stocks 2.0

[7sins]

Originally Posted by logo

I agree, I have June $400 calls which I am up ~100% on and plan to sell those probably next week or the week after before earnings. I’ll hope to take advantage of what should be a bit of an IV spike, and I think (just my guess) it’ll probably get to the 390-395 range pre-earnings. That seems to be where the next resistance level is. I suspect it’ll dip a bit afterwards to consolidate where I’ll likely re-enter with leaps.

That is exactly right, I remember us posting about it awhile back. Look at the IV chart below, IV30 day vs His Vol MA. Notice how much higher IV was earlier in the year, especially with heightened option vol. We saw IV move close to 40 and yet, even with a nice run over the last month, IV hasn't budged and resides in the low 20s. If the SP sustains, IV should stop capitulating and rise causing option value to rise. The SP surpassed $400 once in history, when it shortly spiked to $428 pre-covid. If it keeps moving towards $400, I agree that's probably the time to peel back and wait for a dip. Theta and time decay more of an issue since your calls are for June, your profits could start to dissipate even though the stock price goes sideways or slightly creeps up. ER is april 20th, I suspect IV for options should rise in anticipation, plan to trim some of my exposure on the run up into ER.