How to trade earnings using Fly?

Hi,
In this post, I am attempting to use a butterfly to trade earnings. Stock I am using is SNDK.
The earnings expectation has shot up the IV of the options. Earnings on 20 April.
Fly benefits from a IV crush.
However, a high IV implies that traders are expecting a big move in stock. So ATM fly is ruled out.
How about a directional fly? Sounds like a good idea.
But, for fly to make money, you need to be right on direction, expected price and time.
In this case, I am willing to bet as follows:
Direction: Up
Expected Price: Previous major resistance
Time: Around earnings
To back up my 'prediction' I will have to risk money.. so there you go:



I am willing to risk $40 per contract to test my prediction. If I am right, $$$$$$, but what if I am WRONG?

Who cares... I manage that question by making sure my max loss is small.

Happy Trading
Trader R

My GOOG Fly

Hi
I wanted to post my Google fly I put on almost 2 months back. On ToS platform it is showing me a profit while on Platinum it is showing a large loss. Obviously the large loss is wrong as I cant loose more than my debit of $10 per trade :-)

I am toying with a new idea - Double Cal

Hello Traders:
I was reading the Option Trader Mag, a free monthly e-magazine where they were talking about Double Spreads. I thought why not try one (on Paper).
So here you go: One on SPY




This is essentially 2 calendars (May - June 128 put and 130 call).
Max risk is $135
Max reward $123
However, BE and max reward are sensetive to IV.
The vega of this trade is $9.79.
I did some IV stress test on this trade. It is sensetive. I am putting it on my blog to track it and see how it looks.

Here is one tip: Do call & put calendar just OTM and not a few strikes OTM.
I believe the DC trade works better if strikes are closer together.

I will write more about is later.
Trader R

PS:
(Note: I have directly copied the picture above from Platinum. Here is how:
Right click on the chart & select copy image location
Paste the location in place of ccc in following command:
< i mg src="ccc"/>
Just make sure there are no space between <,i and mg

I closed my 2 credit spreads

I closed both spreads at 60c profit...
:)