F5 Network. (FFIV) Yesterday this stock lost big time with a gap down. The profitable Jan $60 calls were worth almost $6! Today those calls lost 165% of their value. That is why I stress the importance of selling spreads to cover the cost of the straddle or one side of the leg. You still can have a profitable position if prices fall below $42. There is a gap to be filled on the downside from last November, which is between the red signal line and b back to the lows at $40

F5 Networks (FFIV) total cost for straddle was $1887. Jan 45 puts and Jan 60 calls 6 contracts each. The stock is showing signs of a bounce today off the yellow and green signal lines. The open gap on Nov 24^th could be filled on an earnings warning pre-announcements by Jan. The high on the calls came just 3 days after doing the chicken straddle. The high on the $60 calls were $2.75- $3.00. Since the cost of these calls were $1.7, should have closed those out, closer to double the price, then the puts are riding free. Over the next 3 days, should we have a Christmas rally, look to sell the calls for $3.00 or more. Current price on the 9 day pop since last posting is above $60, entire position is profitable. The next 5 days will detemine if we reach a high price of $60.96. Should momentum player jump on the band wagon the price could move higher as this stock has over 3 million shares sold short, creating a short squeeze.

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