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AutoDesk (ADSK) cost $2900 for April 45 puts and April 50 calls The April 45 puts popped on earnings failure to $7, could have recouped cost of straddle First rule, bird in hand if price has doubled take profits, right? Total if still holding both puts and calls, you would down $750, but you still have time to write spreads on the puts and calls for income. High is $48 for stock price, if stock breaks above $48, you will be profitable on the April $50 calls, then write the April 55 calls for income. Monitor the stock price staying above the green signal line, 9 day moving average. This stock is closing in on all three signal line at $44, will follow the market higher or lower over the next 3 weeks. Hold position or write spreads on the April $55 calls is stock price moves this week above $46.50 The April $55 calls are selling for $1.2 and the April $40 puts are selling for $1.6, doing both spreads will bring in $2.8 of income. By doing this, you will bring in income of $1100. Depending on the "see saw" effect, you can buy offsetting positions at a cheaper price if the stock moves to the extreme in one direction. These options expire in April, plenty of time to make chicken straddle spreads.
As Feb lows are hit, the April 45 put option are worth $10 per contract. We have 4 contracts, so they are worth $4000 for the put position. Total profit for the Calls if just selling each leg and not doing a spread is $7.00 X 400= $2800 Total profit for April $45 puts would equal $10 X 400= $4000 Total for each Chicken Straddle would b $2800 + $4000= $6800- $2970 (cost)= net profit =$3830
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