Hey everyone, will be hanging out awaiting the results of earnings for Align Technologies, Service Now, and Tesla this afternoon. These are all companies I have short term options bets on which make up 3% of my portfolio value at risk. There is the potential for some significant upside if these move 5% or more after earnings.
Next up is Service Now. $290 strike price. I paid $18.30 premium so It needs to be above $308.30 or below $271.7. Right now it is trading at $282 so each contract is worth $8.00 meaning I will lose $10 per contract if it stays at $280 tomorrow. I bought 3 straddles so $10 x 100 x 3 = a loss of $3,000 on this one.
Between ALGN and NOW we are at +$1,840 if things stay the same.
Okay so Align is tradding at $213 after hours. So we subtract $213 from the strike price of $265 which means that straddle is worth $52. Then we subtract out the premium I paid which was $27.80 and that leaves us with $24.2 profit per straddle. Because it is an options contract, it represents 100 shares so we multiply $24.2 by 100 = $2,420 then multiple that by 2 because I had two contracts. So our profit on this if Align stays at $213 tomorrow would be $4,840
Now Tesla. Trading at about $243 right now so my $265 strike straddles are worth $22 if it stays here. I paid $18.48 for each straddle which means I'll have a profit of $3.52 if it stays here. We had 3 straddles so $3.52 x 100 x 3 = a profit of $1,056.
I expect this one to move a lot based on the call so who knows.
But add that to the NOW and ALGN profit and we come away with
$2,896 between the three of them.
I risked a total of $17,000 on these three gambles (about 3% of the portfolio) and if things stay the same we will have made a 17% profit in 24 hours.
These were in a taxable account so lets subtract the short-term capital gains tax and use 25% just to be safe. So afte taxes we made $2,172 on this for the portfolio.
I can’t recall the name of the app, but I remember seeing one where an investor can “follow” another investors trades and the originator earns upside, effectively enabling someone to run a fund without the overhead. Would love to follow your trades with a portion of my portfolio!
Next up is Service Now. $290 strike price. I paid $18.30 premium so It needs to be above $308.30 or below $271.7. Right now it is trading at $282 so each contract is worth $8.00 meaning I will lose $10 per contract if it stays at $280 tomorrow. I bought 3 straddles so $10 x 100 x 3 = a loss of $3,000 on this one.
Between ALGN and NOW we are at +$1,840 if things stay the same.
Waiting on Tesla....
Okay so Align is tradding at $213 after hours. So we subtract $213 from the strike price of $265 which means that straddle is worth $52. Then we subtract out the premium I paid which was $27.80 and that leaves us with $24.2 profit per straddle. Because it is an options contract, it represents 100 shares so we multiply $24.2 by 100 = $2,420 then multiple that by 2 because I had two contracts. So our profit on this if Align stays at $213 tomorrow would be $4,840
Now Tesla. Trading at about $243 right now so my $265 strike straddles are worth $22 if it stays here. I paid $18.48 for each straddle which means I'll have a profit of $3.52 if it stays here. We had 3 straddles so $3.52 x 100 x 3 = a profit of $1,056.
I expect this one to move a lot based on the call so who knows.
But add that to the NOW and ALGN profit and we come away with
$2,896 between the three of them.
I risked a total of $17,000 on these three gambles (about 3% of the portfolio) and if things stay the same we will have made a 17% profit in 24 hours.
These were in a taxable account so lets subtract the short-term capital gains tax and use 25% just to be safe. So afte taxes we made $2,172 on this for the portfolio.
I can’t recall the name of the app, but I remember seeing one where an investor can “follow” another investors trades and the originator earns upside, effectively enabling someone to run a fund without the overhead. Would love to follow your trades with a portion of my portfolio!
Awesome newsletter - love the transparency and option plays!
Which app are the screenshots from?
Thanks for sharing your valuable insights! Cheers