Option Strategies: PANW& AMAT
Hello everyone! Today I want to share some option strategies with you!
1.
Locked in the profit from this $Palo Alto Networks(PANW)$ 175p optionselling trade yesterday.
Gonna let the 185p ride for now. Sold (or you could say essentially "rolled") a new trade on PANW - Nov 17 exp 220 strike puts.
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2.
Earnings trade idea on $Applied Materials(AMAT)$
Earnings Release: Nov 16th after market close
Expected Move: 3.4% for Nov 17 exp and 6.3% for Dec 15 exp (although, we don't put too much belief into the Dec 15 exp because a lot can happen between now and then)
Entry: AMAT has had a very strong and steep run-up heading into earnings today. And the price is trading not too far from its all-time high in the mid-160s. We could be totally wrong, but we find it hard to believe that AMAT will establish a new all-time high considering the broader economic environment and its steep run-up in price. We are targeting the Dec 15 exp 170-175/180-185 strike credit call spread, and we might turn this into an Iron Condor trade and sell a put credit spread at the 135-140/125-130 strikes (same expiration).
Exit: If we sell an Iron Condor, then we will close the winning leg for profit. For the losing leg, we will check premiums to see if IV crush positions us in profit. If so, then we'll close that leg too. If not, then we might ride the position out under the assumption that our short strikes are far enough away to not get breached and theta decay will do its job and kill the premium to buy-to-close the trade.
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3.
Probs going to take this optionselling trade on $Applied Materials(AMAT)$ . And, am actually looking at the 165/170 call credit spread. For us, this is a riskier trade because
1) AMAT has been on a path to push for an ATH (or at least test it again) and
2) if lots of retail are betting on downside then we could see tutes/hedgies push the price up to burn those puts tomorrow. That said, AMAT does look overextended to the upside and primed for a reversal. And its at a price level primed for profit-taking. R/R on the trade is acceptable to us, and we can always roll the short strike higher if need be.
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4.
Let's see if the guidance keeps it going lower or saves it (doubt it). Sold the 165/170 call credit spread right before close. Should've loaded more contracts.
Shoulda, woulda, coulda
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