RIOT announces earnings on Monday, so I'm not keen on stepping in front of what is likely to be a moving bus. However, I may consider something post-earnings and wanted to price things out here ahead of time to give me some idea as to where I might want to set up up my tent and what that might be paying. Unfortunately, the weeklies aren't that great for liquidity, and there's no July monthly at the moment, so would either have to trade June (33 days) or August (96 days). So, like, which one?
June implied is at a whopping 185.3% (no doubt due to earnings); August at 120.7%.
The June 18th 14 delta 17 strike is paying 1.23 at the mid, 7.8% ROC at max, 86.3% annualized; the August 20th 13 delta 15, 1.88, 14.3% at max, 54.4% annualized. I'm using the same approximate delta for both expiries to kind of compare "apples to apples."
Naturally, there are trade-off's. The shorter duration, similarly delta'd June 17 pays more on an annualized basis, but it's closer to at the money. Conversely, the August 20th 15 pays less on an annualized basis, but is farther away from current price, so gives you more room to be wrong, as well as more premium to potentially take off at 50% max -- 50% max of 1.23 is .61; 50% max of 1.88 is .94.
Additionally, the August setup has a smaller buying power effect versus the June: 13.12 versus June's 15.77 (cash secured). On margin, the difference will be smaller with a buying power effect for the 17 being around 3.40; the 15, 3.00 even.
For me, it boils down to answering the question: "Am I comfortable with acquiring it at 17 or more comfortable at acquiring it at 15?" To me, the answer is "lower," and so am mostly likely to go with the August setup. Naturally, this will all be moot if it takes off like a rocket post-earnings, in which case I won't put on a trade.
June implied is at a whopping 185.3% (no doubt due to earnings); August at 120.7%.
The June 18th 14 delta 17 strike is paying 1.23 at the mid, 7.8% ROC at max, 86.3% annualized; the August 20th 13 delta 15, 1.88, 14.3% at max, 54.4% annualized. I'm using the same approximate delta for both expiries to kind of compare "apples to apples."
Naturally, there are trade-off's. The shorter duration, similarly delta'd June 17 pays more on an annualized basis, but it's closer to at the money. Conversely, the August 20th 15 pays less on an annualized basis, but is farther away from current price, so gives you more room to be wrong, as well as more premium to potentially take off at 50% max -- 50% max of 1.23 is .61; 50% max of 1.88 is .94.
Additionally, the August setup has a smaller buying power effect versus the June: 13.12 versus June's 15.77 (cash secured). On margin, the difference will be smaller with a buying power effect for the 17 being around 3.40; the 15, 3.00 even.
For me, it boils down to answering the question: "Am I comfortable with acquiring it at 17 or more comfortable at acquiring it at 15?" To me, the answer is "lower," and so am mostly likely to go with the August setup. Naturally, this will all be moot if it takes off like a rocket post-earnings, in which case I won't put on a trade.
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لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.