Sold half for 65c for 140% profit
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VMW reports earnings today after close and looking at the weekly chart below, I liked the idea of VMW staying above the lows for a few days/weeks. Looking at the declining markets and VMW at it's lows I thought there are good chances VMW might get pinned to $85 for the month.Although I liked the 80/85/90 butterfly safer and attractive too, I went ahead with 82.5/85/87.5 butterfly looking at a very skewed risk/reward potential as shown in the two images below.
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| VMW Weekly chart |
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| Risk/Reward with current Implied Volatility |
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| Risk/Reward with assumed lower Implied Volatility for the expiry |
Trade:
Buy 1X $82.5 Nov call
Sell 2X $85 Nov call
Buy 1X $87.5 Nov call
(Paid 27c)
*Please do your own research before buying any stock listed here. Disclaimer.
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