On October 22, 2020, we bought our first straddle options GT stock expiring tomorrow October 23.
This is our first experience with straddles and earnings play. These trades were created to learn and understand better how these two (straddles and earnings) are working together
here is our trade setup:
- BOT 1 GT OCT 23 '20 10 Call Option 0.27 USD
- BOT 1 GT OCT 23 '20 10 Put Option 0.13 USD
For these trades, we paid 40 USD (before commissions)
These trades come as the #28 and #29 in the month of October, as these are the debit trades instead of getting paid, we paid money to have them
here is what should happen next to make us some profit.
If GT stock is trading above $10.4 after earnings announcement we are making a profit, also if the stock is dropping below $9.6 to make us a profit
As our strike is constructed around $10, the stock should move about 4%