Earnings done - 7/31, 1000 puts - high reward/risk

The stock has low volume, and low options volume, so I usually avoid it. However with such a huge run up since March, indicators hint at profit taking to ensue. If selling picks up in next few days then stock should head towards 1000-1080. Best volume and price (still very low) is on 1000 strike for 7/31 expiry. I bought puts for 60 cents, and I will exit today or tomorrow if price and 30min charts do not support my trade idea.

تم فتح الصفقة:

With little volume and unpredictability, it is better to have a GTC (good 'till cancelled) order set. I have sell orders at $3.30 and $5 on 80% of my contracts. I will adjust as needed. Using my options pricing tool, I should be able to sell these contracts in $3.00-3.80 range if stock is at 1100 tomorrow.

تعليق:

my above price targets were based on some IV rise which has not yet happened. This is the difficulty with low volume stocks/options. I am holding overnight, and may lower my first target to $2.00-2.50 if IV stays low.

تعليق:

On the weekly chart there is a hanging man candlestick (last week) and now it appears a bearish engulfing. I am holding puts into next week.