OPEN: SWIM Short Straddle Mar 12.5 Call/Put

Also found another straddle opportunity on SWIM. Being a former Investools student, I occasionally check SWIM to see how it's doing. Last night, I found that earnings was today and the volatility and probability were high enough for this straddle to work. Mojo at InsaneMoney found a naked call opportunity, but I prefer the straddle since I am more familiar with them. Not ready to go naked yet! :)

So GMoney and I went in and sold the Mar 12.5 Call & Put for a total credit of $2.37.

This gives us a yield of $2.37/5.00 risk (credit plus margin)= 47.4% in 1 week

Average time to stay in a straddle is 7-10 days, basically, until volatility crushes and you get out by buying it back much cheaper than you sold it!

Take a look at the probability screens below. I chose the 12.5 (top screen) over the 15 (bottom screen) because I had an 84.84 % chance with the 12.5 versus the 70.34% chance with the 15 that the stock would land in my breakeven (B/E) range after the news event. So even though I got a lesser credit of $2.30 versus the $2.70 on the 15, since my probability is much higher, "I'd rather be right than rich" as Mojo like to say!