We are in the heart of earnings season so my trading focus tends to be in this area of my trading process. $NFLX was an important release after hours on 7/22 so I wanted to design a trade that allows me to participate in either direction.
Since I like flexibility in my trade design, I settled on the following trade:
Here is a breakdown:
I am short the Aug 2w/July 26w 225 Put Calendar
I am short the July 26w 310 Call
I am long the Aug 2w 310/325 CS
This was done for a $5600 credit (25 contracts)
In after hours I shorted the stock for a nice 2.5% gain. Later in that session I went long as it came back up through the 245 level. I added a trail stop today, 7/23, which was hit earlier for a 4.5% gain.
As for the Option pieces, this is what I have done so far:
What remains & the plan:
I am short the Aug 2w 225 Put. Ride to expiration (or buy back if it gets real cheap)
I am long the Aug 2w 310/325 CS. Tighten the spread to 310/315 & take out more $