Tuesday, March 13, 2012

$FFIV setup 13mar

13mar- stock is moving well, up $5 today and breaking to new high.. the break thru resistence to new high would usually be a trigger for me to enter a new credit put spread. what is keeping me out is that earnings are on 18apr, right before opex..so IV will increase into earnings as usual and will offset the time decay. so the only way to profit is stock appreciation. with credit put spreads id like to get that appreciation AND time decay in case the stock does not move. If you absolutely have to enter a new spread, keep the short strike at/below the 50day MA which lines up to the support line from the dip a few days ago.
   I will be looking for a pullback to that 50day if the market sells off with the presumption that it rebounds prior to earnings, best case is getting a spread with short strike at/below the 200day