First Solar are releasing earnings after market close today. Recent price action over the past two months has been choppy and heading into a range bound pattern.
Implied volatility for this week's expiry (Feb 26) is very high at 107%.
My bet is that the stock, even after earnings are released, will remain fairly range bound and I have executed a short Iron Condor using the $67.50/$68 call options and $60.50/$60 put options.
This is a credit spread done at $28 per contract and I did it for a huge 2 lots!
Max profit if the stock stays inside $67.855 and $60.145 will be $57 and max loss if outside this range will be $43.
Here is the payoff profile graph:
Here are the order details and options screen:
Update 24th February
Even though my order was for 2 lots I was only filled for 1, so my max loss can now only be $26 and max profit of $24.
Update 26th February
Check out the rally after FSLR reported stronger than expected earnings:
The above chart was taken after Friday's close, which was well above our upper break levels. This means I've reached the max loss on the trade of $26.20.
Here are the closing values:
|FSLR Iron Condor|
|FSLR Feb26 $67.50 Call||-1||1.01||2.75||-174|
|FSLR Feb26 $68.00 Call||1||0.921||2.25||132.9|
|FSLR Feb26 $60.00 Put||1||1.861||0||-186.1|
|FSLR Feb26 $60.50 Put||-1||2.01||0||201|