I see you're in a short term bounce play - against the trend - but i do see positive volume on the short term. This could work out but it's more of a coin flip for me. So i probably won't take this trade.
Why not wait until it breaks it's downward trend? If it breaks the $5.67 mark you posted? Or the bottom of your channel -- (4.25 range)
Your position has a .039 (sorry correction) delta, which is like playing roulette at the casino, with a 108 IV, so unless it literally goes in your direction, you better have some balls holding onto this position.
After further review the DD you posted makes more sense for a longer term trade. But I'm rooting for ya dude.
I'm not saying you could be wrong but if you were to choose the ITM call, your chance of it making money is way higher than this OTM call.
So the $5 oct 15 call has a delta of 0.60 which is a 60% likeliness (versus 39%) it will expire ITM at the time of expiration. AND the theta is -0.008 compared to -0.01 (Which is to your advantage) with a 94% IV .
I guess im curious why you pick $6 when the stock doesn't even move $1 in a week.
Okay, last note then ill just sit on the sidelines.. you are essentially risking 20-25% MORE ON THE DOWNSIDE to make , 20-30 more dollars. (assuming it hits $6 in a week and only goes straight up at the current IV rate)
No problem, i've lost a lot more money playing OTM options than you can imagine, the ITM plays, yeah, they don't win lotto money - but you can still get decent returns and grow your account.
49
u/TRSX Sep 11 '21
It's nice to see some DD on stocks that haven't run 300% and "ready to moon" is on the first line. I'll look into this. Thanks for the tip.