Taking an existing trade into earnings

I have a current position in $LULU

LULU_earningsThe noted Collar is for September and here is the break down:

  • I am long stock
  • I am short the 75 Calls
  • I am long the 70/60 Put Spread

Here are a few scenarios on how this can play out:

1) stock goes nowhere. Fine. I will do nothing until expiration next week

2) stock pops to $75. Also fine. I will likely adjust to October options when I fee that it has stalled (put on a new Collar)

3) stock tanks to $60. Ugh. Well I guess that is fine too. The Put Spread offsets the loss on the long stock piece (if did not sell or let it Stop out).


One thought on “Taking an existing trade into earnings

  1. So far I have done the “sell the meat, leave the buns” for the Collar. See the weekly Position Update post for up-to-date info,

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