Bought January 2012 Synthetic Long on Broadcom (BRCM) at $45 strike. Bought Jan 2012 $30/60 Risk Reversal as well
Trade Reasoning:
Takes advantage of leveraging by doing a synthetic instead of just longing the actual stock.
Choosing OTM Call (ATM Put) is because we are bullish and that way we would be receiving net credit of the whole trade. The payout is very similar if we choose ATM Call (OTM Put) strike at $40 for a net debit.
Buying a Risk Reversal because we believe it will not go above $60, and giving us a downside protection at $30.
Breakdown of the trade:
Synthetic Long :
Bought Jan12 $45 Call @ $3.38
Sold Jan12 $45 Put @ $7.58
Risk Reversal:
Bought Jan12 $30 Put @ $1.46
Sold Jan12 $60 Call @ $0.52
Net Credit : $3.26
Bought Sept 2011 $60 / $52.5 Put Spread on Research in Motion @ $2.80, delta:16 vol:39%, bought underlying at $62.03 to be delta neutral.
RIMM earnings tomorrow, wants to get some downside exposure.
April's vol is pretty elevated at 50ish …
the September 60/52.5 put spread seems pretty reasonable at 4.5%
compared it with June 60/52.5 put spread costs 4% @ 45vol, we decided to buy the September Spread, which gives us more time to trade around with it..
Shorted Citigroup @ $4.51. Gapped up Doji today.. sign of reversal?
after rebounding from its low earlier this week, friday's daily candle showed a gapped up DOJI.
we see that as a sign of reversal and so we placed a short on Citi and it was filled at $4.51
Covered more delta for AMD @ $8.23, to maintain Delta Neutral after big drop today
covered more delta for our $9 Put that is expiring this friday.
Bought more AMD at $8.23 to maintain Delta Neutral after big drop today
