CLOSE: SHLD Post Earnings Butterfly +53.9%

Earnings came out last night so G$ and I did anothe white hoof (post earnings butterfly) on paper.

BOT BUTTERFLY SHLD JUN 08 85/90/95 CALL @ $0.76 debit
SOLD BUTTERFLY SHLD JUN 08 85/90/95 CALL @ $1.17 credit

1.17-.76/.76= 53.9% ROI in 1 day!

CLOSE: NTES Post Earnings Butterfly +27.7%

Here's the 4th backtested butterfly I have done ....

This one was a fighter as we had craziness from the unemployment report that came out this morning as well as the fact that we're approaching a 3 day holiday weekend. This one took longer than expected to complete, but eventually-with patience and a few adjustments in my order prices, I completed the trade.

At 11:49am I entered as follows:
BOT BUTTERFLY NTES 100 JUN 08 20/22.5/25 CALL @.83 debit

At 3:40pm, I exited as follows:
SOLD BUTTERFLY NTES 100 JUN 08 20/22.5/25 CALL @1.06 credit

1.06-.83/.83= 27.7% ROI in a few hours!

Please note this is a paper trade.....

CLOSE: CCJ Post Earnings Butterfly +3.2%

This one was a monster trade. I was at around a 20% loss for a while on this one, but it never hit my stop loss near 30%.

My fellow trade buddies that did this trade got stopped out today, but luckily, I took off my stop loss last night seeing the volatility craziness. Since this position was sized correctly for max loss, I figured that I was already willing to lose the full debit I spent, so I took off the stop loss to see where it would go today.

On 5/14/08 I entered as follows:
BOT BUTTERFLY CCJ JUN 08 45/40/35 PUT @1.90 debit

Today I exited at just above breakeven for a small profit merely on a volatility fluctuation:
SOLD BUTTERFLY CCJ JUN 08 45/40/35 PUT @1.96 credit

1.96-1.90/1.90= 3.2% ROI in 7 days

CLOSE: SOLF Post Earnings Butterfly +37.1%

Here's another backtested butterfly....this stock announced earnings last night at 8pm. The open interest on the Jun 30 calls was over 13,000, so this made a good candidate for a "Hoof."

Today at 11:04am, I opened this trade as follows:
BOT BUTTERFLY SOLF JUN 08 25/30/35 CALL @ $0.89 debit

I immediately placed an exit order and got filled 24 minutes later at 11:35am as follows:
SOLD BUTTERFLY SOLF JUN 08 25/30/35 CALL @ $1.22 credit

1.22-0.89/0.89= 37.1% in 24 minutes!

CLOSE: CSUN Post Earnings Butterfly +29.6%

Here's another post earnings butterfly (white hoof) from GMoney that I traded within 30 minutes today.

CSUN also had earnings yesterday with a gap down first thing this morning from yesterday's close. Then it headed back upward to try to fill the gap all day.

When I first looked at the trade around 3pm, the debit was around 0.70, so I placed my order at 0.55 to see if it would fill. After about 4 minutes, the volatility fluctuated so I got in as seen below:
At 3:04pm, BOT BUTTERFLY CSUN JUN 08 15/12.5/10 PUT @.54 debit


Then I immediately put my exit order in for 0.70 as this was the highest price I had seen it go all day. It took a while to fill as the volatility moved the price around a bit between 0.725 and 0.60.

At 3:35pm, SOLD BUTTERFLY CSUN JUN 08 15/12.5/10 PUT @.70 credit

.70-.54/.54= 29.6% ROI in 30 minutes! WOW!

Although I capped my gains by getting out quickly, the great thing is that I was able to capture a great profit in a very short time.

This strategy is being backtested now and is being done through paper trading with TOS. Please be advised that if you are trading this real money, you may not get the same fills as me and when I do. ALso, remember to size these for max loss (i.e. you're willing to lose all that you spent on the trade), instead of setting a stop loss. This way you don't get stopped out for no reason in the middle of the volatility craziness. Good luck!

CLOSE: PBR Post Earnings Butterfly -36.2%

On 5/13 I entered the trade as follows:
Bought Jun 70 put
Sold Jun 65 put
Bought Jun 60 put

Net debit of $0.94

Today, I couldn't take any more pain from this "hoof." I put in a stop order at 30% and got stopped out in the afternoon.

SOLD -195 BUTTERFLY PBR 100 JUN 08 70/65/60 PUT @.65 credit

.65-.94/.94= -36.2% loss

I have thus changed my strategy a bit with GMoney on these post earnings butterflies. See my close posts for CSUN & AZO today.

CLOSE: AZO Post Earnings Butterfly +30.1%

Today GMoney posted a butterfly ('white hoof") so I decided to get in after the 1st hour.

This stock has been heading upward since April so we did the calls instead of puts.
Earnings occurred last night at 8:30pm so allowing this to open this morning to see where it would end up post earnings helps shave your risk down dramatically.

When I looked at this trade at 12:42pm, this butterfly was worth about 0.95, so i placed an order to fill at 0.75 so I could capture more of the volatility craziness today. The greeks still looked good where my theta was worth twice my delta, giving me great protection on my shorts.

BOT BUTTERFLY AZO JUN 08 125/130/135 CALL @.73 debit

Then I put an exit order to fill at 0.95. I got filled at 1:07pm at 0.95.
SOLD BUTTERFLY AZO JUN 08 125/130/135 CALL @.95 credit

.95-.73/.73= 30.1% in less than 1 hour!

You may still be able to capture the volatility if you play with your order price...be patient and watch it. Good luck!

CLOSE: DE Butterfly +17.1%

On 5/14/08 I opened the trade as follows:
Bought DE JUN 08 75/85/95 CALL @ $3.63 debit

Today after the volatility crush, I exited as follows:
SOLD -55 BUTTERFLY DE 100 JUN 08 75/85/95 CALL @ $4.25 credit


4.25-3.63/3.63= .62/3.63= 17.1% in 2 days!

OPEN: DE & CCJ Butterflies

Earnings came out yesterday for both DE & CCJ, so we are doing some more "White Hooves" or post-earnings volatility crush plays.

Bought CCJ JUN 08 45/40/35 PUT @ $1.90 debit

Bought DE JUN 08 75/85/95 CALL @ $3.63 debit

OPEN: PBR Butterfly

This is another post earnings butterfly or "White Hoof Special" as my trading group likes to call it, courtesy of G-Money.

Earnings came out on 5/12/08 and the stock has started it's bullish move with a gap up from yesterday's close this morning and volatility is higher than it has been for PBR over the past year at least. In this type of trade, you expect volatility to start to drop (when stocks move up or after the news comes out like with earnings, because typically volatility drops because there is less fear among investors). So I am buying this butterfly today as follows...

Bought Jun 70 put
Sold Jun 65 put
Bought Jun 60 put

Net debit of $0.94

Exit upon volatility crush within 7-10 days post earnings.