Some stuff hits my high IVR/high IV radar over and over again. WYNN is one of those, with an IVR currently at 100 and an IV at 81.
Some caution is in order, though, since ordinarily I like going 45 days out and WYNN's earnings are due to be announced on 2/2, so I want any setup to expire somewhat before that so I don't get caught in a volatility expansion (that being said, how much more can it expand?).
Here's the setup (which I'll look to take off somewhat in advance of expiry), since it's getting in a bit tight to earnings:
Jan 22nd 45/77 short strangle
POP%: 79% (ridiculous, quite frankly for a play that is nearly worth 2.00 in credit)
Max Profit: $196/contract
BPE: ~$615
BE's: 43.04/78.96
Some caution is in order, though, since ordinarily I like going 45 days out and WYNN's earnings are due to be announced on 2/2, so I want any setup to expire somewhat before that so I don't get caught in a volatility expansion (that being said, how much more can it expand?).
Here's the setup (which I'll look to take off somewhat in advance of expiry), since it's getting in a bit tight to earnings:
Jan 22nd 45/77 short strangle
POP%: 79% (ridiculous, quite frankly for a play that is nearly worth 2.00 in credit)
Max Profit: $196/contract
BPE: ~$615
BE's: 43.04/78.96
Comment:
Rolling the 45 short put up to the 58 (same expiry) for an additional .99 credit to delta balance the setup.
Comment:
Covering here for a 2.07 debit. I got the originally setup filled for 1.96, got an additional .99 with the intratrade roll, for a total of 2.95 in credit. Closing out here for 2.07 results in a .88 ($88/contract) profit.