Rocket - LYFT Iron Condor 11-10-20
LYFT Iron Condor
We are initiating an Iron Condor in LYFT ahead of earnings tonight.
LYFT is trading at $36.73.
We will look for LYFT to close Friday between $35 and $40 with this trade for a max profit.
All Options are for LYFT and expire Friday November 13th
Sell $40 call
Buy $42.50 call
Sell $35 put
Buy $32.50 put
Our max profit is the $1 we collect upon initiating this trade. Our max loss is $1.50 if LYFT closes Friday below $32.50 or above $42.50. Options are pricing in a $3.91 move for their earnings tonight.
We will look to absorb some of the premium in this stock. I don't see it tanking with the good vaccine news we got yesterday, yet I also don't see it exploding higher after the huge run its had recently on the heels of the ballot amendment passing in CA and vaccine new yesterday. This might be a good situation where it has a limited trading range, and the risk vs reward is nice for this trade with a pretty wide range of where LYFT can trade before Friday. Anything is possible when selling volatility for a ride hailing company during a pandemic so set your position size accordingly. A max loss is always a possibility when making these types of trades. We need to be successful in this trade greater than 60% of the time to be profitable.
LYFT is trading at $36.73.
We will look for LYFT to close Friday between $35 and $40 with this trade for a max profit.
All Options are for LYFT and expire Friday November 13th
Sell $40 call
Buy $42.50 call
Sell $35 put
Buy $32.50 put
Our max profit is the $1 we collect upon initiating this trade. Our max loss is $1.50 if LYFT closes Friday below $32.50 or above $42.50. Options are pricing in a $3.91 move for their earnings tonight.
We will look to absorb some of the premium in this stock. I don't see it tanking with the good vaccine news we got yesterday, yet I also don't see it exploding higher after the huge run its had recently on the heels of the ballot amendment passing in CA and vaccine new yesterday. This might be a good situation where it has a limited trading range, and the risk vs reward is nice for this trade with a pretty wide range of where LYFT can trade before Friday. Anything is possible when selling volatility for a ride hailing company during a pandemic so set your position size accordingly. A max loss is always a possibility when making these types of trades. We need to be successful in this trade greater than 60% of the time to be profitable.