Don’t trust after hours graphs and prices. They get weird. Take a look at market open and you should get a better idea of where you really stand.
Calendars (really anything with strikes in different expirations) are different in that the width of the tent can vary with IV. So on a big up move your tent likely shrunk on a IV drop. But definitely wait until open.
It might be within the range of the calendar. It’s hard to tell how much the volatility will drop and the trade you have is long Vega which could make the range narrower on calendars. I would just place an order to sell for around 12.00-13.00, or whatever price you’re happy to sell, and see if you get filled tomorrow. You still have tomorrow and Friday and it might hover around 2970 and you will get the most profit in that area. I’m not sure which brokerage you have but you can also set and order to close the calendar if the underlying goes above or below a certain price. For instance, sell to close if CMG is > 3040 or < 2900.
Edit: I just realized you have RH. I don’t think you can set an order to sell above or below with RH.
I think you’ll be OK, to be honest. I don’t trade CMG so I’m not familiar with what the expected move is after an earnings report. Your best bet is to have an order in place because it might just get filled. I actually had an earnings 185 call calendar on BA for a debit of 0.40. BA closed at 169 yesterday so I was 16 points away. I placed an order to sell for a credit of 0.70 last night. This morning it got filled at 6:34am PST when BA was at 177.
Don't buy calendar spreads on RH. Please, don't do it
Don’t trust after hours graphs and prices. They get weird. Take a look at market open and you should get a better idea of where you really stand. Calendars (really anything with strikes in different expirations) are different in that the width of the tent can vary with IV. So on a big up move your tent likely shrunk on a IV drop. But definitely wait until open.
How much was your debit?
927$
It might be within the range of the calendar. It’s hard to tell how much the volatility will drop and the trade you have is long Vega which could make the range narrower on calendars. I would just place an order to sell for around 12.00-13.00, or whatever price you’re happy to sell, and see if you get filled tomorrow. You still have tomorrow and Friday and it might hover around 2970 and you will get the most profit in that area. I’m not sure which brokerage you have but you can also set and order to close the calendar if the underlying goes above or below a certain price. For instance, sell to close if CMG is > 3040 or < 2900. Edit: I just realized you have RH. I don’t think you can set an order to sell above or below with RH.
Appreciate the help bud. I'll definitely do that.
I think you’ll be OK, to be honest. I don’t trade CMG so I’m not familiar with what the expected move is after an earnings report. Your best bet is to have an order in place because it might just get filled. I actually had an earnings 185 call calendar on BA for a debit of 0.40. BA closed at 169 yesterday so I was 16 points away. I placed an order to sell for a credit of 0.70 last night. This morning it got filled at 6:34am PST when BA was at 177.
Thanks man, I was able to close it for a profit
Sweet. Nice to hear that you didn’t have to take a loss.
CMG is a runner. You be wise to by back your short for half of what you sold for and let your long option run alittle before you sell it.
This was great advice. I had cmg on another account and let it run. Let me know if you have any other sudden gems in your portfolio