Comments on: Milking Priceline http://theoptionguru.com/blog/2010/02/milking-priceline/ Covered Call and Option Spread Trading for Income Tue, 07 Sep 2010 18:04:00 -0700 hourly 1 http://wordpress.org/?v=3.0.1 By: Bruce http://theoptionguru.com/blog/2010/02/milking-priceline/comment-page-1/#comment-770 Bruce Tue, 16 Feb 2010 17:32:22 +0000 http://theoptionguru.com/blog/?p=1480#comment-770 I think the disparity in Vega between the two months PCLN 210 Calls is what is killing me. Delta is pretty much even between Feb and March strikes. So price is nearly insignificant.<br><br>My Vega is .09 in Feb, but .25 in March. So losing three points in IV in both months ends up hurting me three times worse in March which of course is the Call I want to sell. I think the disparity in Vega between the two months PCLN 210 Calls is what is killing me. Delta is pretty much even between Feb and March strikes. So price is nearly insignificant.

My Vega is .09 in Feb, but .25 in March. So losing three points in IV in both months ends up hurting me three times worse in March which of course is the Call I want to sell.

]]> By: Jeff W http://theoptionguru.com/blog/2010/02/milking-priceline/comment-page-1/#comment-768 Jeff W Tue, 16 Feb 2010 15:50:34 +0000 http://theoptionguru.com/blog/?p=1480#comment-768 Bruce,<br><br>Here is what I am seeing right now. Volatility is through the roof on the short FEB options, which is eating into my profit - it's down over 50% from my expectation as of last week (this brings them closer to my sale/entry price). Truly a lesson to be learned.<br><br>Based on the current volatility, I can make more if I wait until tomorrow - with the added risk. If volatility increases even more, the additional risk may not make it worth it. Hmmm...<br><br>◄ Jeff ► Bruce,

Here is what I am seeing right now. Volatility is through the roof on the short FEB options, which is eating into my profit – it's down over 50% from my expectation as of last week (this brings them closer to my sale/entry price). Truly a lesson to be learned.

Based on the current volatility, I can make more if I wait until tomorrow – with the added risk. If volatility increases even more, the additional risk may not make it worth it. Hmmm…

◄ Jeff ►

]]> By: Bruce http://theoptionguru.com/blog/2010/02/milking-priceline/comment-page-1/#comment-769 Bruce Tue, 16 Feb 2010 14:53:33 +0000 http://theoptionguru.com/blog/?p=1480#comment-769 Beware of liquity! You can't simply split the bid/ask. I am trying to sell at 4.25 and haven't been able to get out even when split hits 4.35 on PCLN. Market depth reveals that the marketmakers are really taking advantage of it being both earnings and option week. Beware of liquity! You can't simply split the bid/ask. I am trying to sell at 4.25 and haven't been able to get out even when split hits 4.35 on PCLN. Market depth reveals that the marketmakers are really taking advantage of it being both earnings and option week.

]]> By: Bruce http://theoptionguru.com/blog/2010/02/milking-priceline/comment-page-1/#comment-767 Bruce Tue, 16 Feb 2010 12:24:41 +0000 http://theoptionguru.com/blog/?p=1480#comment-767 Here is earnings whisper Number<br><br>4th Quarter Ending December 2009<br> Earnings Whisper ®: $1.85 <br> Consensus Estimate: $1.50 <br> Members' Estimate: N/A <br> Surprise Expectation 1: 75%/0% <br> Release Date: Confirmed 2/17/2010 <br> After Close <br><br>I haven't made my mind up if I should get out today or wait until tomorrow AM.<br><br>Looking at new calendars I guess I am glad I waited since today will be a big up day (according to morning future reports). It is weird to be concerned about big up days.<br><br>The other question I am pondering is: " if I am concentrating on Theta should I always wait until the closing bell to place a calendar and thus avoid undue risk?" Here is earnings whisper Number

4th Quarter Ending December 2009
Earnings Whisper ®: $1.85
Consensus Estimate: $1.50
Members' Estimate: N/A
Surprise Expectation 1: 75%/0%
Release Date: Confirmed 2/17/2010
After Close

I haven't made my mind up if I should get out today or wait until tomorrow AM.

Looking at new calendars I guess I am glad I waited since today will be a big up day (according to morning future reports). It is weird to be concerned about big up days.

The other question I am pondering is: ” if I am concentrating on Theta should I always wait until the closing bell to place a calendar and thus avoid undue risk?”

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