EEM Calendar - 140 July/Aug calls
Written on June 25, 2008 by OptionsRopeaDope
This is not an ideal setup, but still good probabilities. I just wish they were a little better, but I feel that way about every trade. EEM has dropped like a rock, over 10% recently, but IV is still actually low, so the sentiment is that this is nothing to panic about - a correction perhaps. IV is great - in lower fifth of the range for the past year, and I was just waiting for the skew to come in line, and for the FOMC meeting to pass. Here are the stats:
| Symbol | EEM |
| Current Price | 138.15 |
| Current IV | 33 |
| IV Percentile - last 12 months | 20% |
| IV Percentile - last 6 months | 20% |
| IV Skew | -1.8 |
| Technical Support/Resistance | 125, 155 <-LOL |
| Opening Strike | 140 |
| Opening Debit/months | 2.40, July/Aug calls |
| Break Evens | 134, 147 |
| Std Dev move to expiration | 23 days, 11 points |
| Prob of expiring w/o adjustments | 40% or so |
| Profit Traget | 2.88 |
| Max Loss | 1.88 (25% loss) |
| Back month options exist for adjustment? | Yes |
| Earnings/news catalyst before exp? | n/a |
| Risk Graph |
Very wide break evens, past the adjacent strike, which is nice. EEM has moved strongly recently, so this may end up anywhere.
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Posted in Real Trades, Calendars, EEM
Coincidentally, I took almost the same trade today. I was getting a little long deltas in my overall portfolio, so I took this as a double calendar on the 130/140 strikes - same months as you. This puts me a little short on deltas, but balances my overall portfolio better. Anyway, I like this one and think it will do well.
Bill