sporting goods

DKS Earnings Iron Condor – CLOSED

What’s the trade?  

DKS Iron Condor

9/17/21 – This trade is now closed. We let DKS expire for a loss.

9/13/21 – DKS has had a nice pullback to around 130. While I’m mentally prepared for a max loss of over $300, it certainly would be nice if we could get out of this one for a break even. Since we’ve collected $163 in credits, I’ve put in a GTC order to close this one for a $163 debt. Our break even at expiration is 126.63, so we’re not too far off now.

9/2/21 – This DKS Iron Condor had an a outlier move, which unfortunately happens. Good thing this was defined risk and has a max-loss of ~$336 built into the trade. We’ve tried to manage, by rolling the puts up for a small credit, however they are not filling. Your options at this point are either to 1) Close today for a -$323 loss or 2) Hold on for another 2 weeks to see if there is a pullback in DKS which would reduce the closing costs. Since we’re near max loss, I’m inclined to continue holding as the difference between today and 9/17 is only going to put me down another -$13, and I’m ok with that for the (small) possibility of a reversal. Stranger things have happened and this gives my portfolio some negative SPY beta-weighted-delta of -1.47 while I wait. This means for every dollar SPY goes down over the next few weeks, this trade could profit by $1.47. 

8/30/21 – With < 21 days until expiration, we are attempting to squeeze a little more premium out of this trade that has breached our call side. We are trying to collect anywhere from $25 – $55 in credit to roll the 96/101 puts to 120/125. If this trade fills, it will be an “Iron Fly”. We need DKS to have a down move.

8/25/21 – Post Earnings, Dicks is surging due to positive earnings, but we have over 21 days to expiration left so let’s just hold for now.

8/25 – Post Earnings, Dicks is surging, but we have over 21 days to expiration. Put in a GTC for 81$ and hold for now.

Earnings for DKS is 8/25 before the bell. Sell an Iron Condor in $DKS for at least a $166 credit.

With DKS trading at 114 on 8/24

  • Buy the Sept 17 96 Put
  • Sell the Sept 17 101 Put
  • Sell the Sept 17 130 Call
  • Buy the Sept 17 125 Call
  • Premium: Try to collect at least $166, which is 1/3 the width of the strikes.
  • Rationale: This is s defined risk trade. DKS has earnings before the bell on 8/25 and has a high IV Rank of 63%. After earnings, the Implied Volatility tends to go down and reduce the price of the short options you’ve sold. Max loss is 500-premium collected.
  • Probability of making 83$: 71%
  • Assumption: Neutral
  • Timeframe: Overnight to 3-4 weeks
Daily View, pre-earnings 8/24/21

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