AUXL – Earnings update

Friday morning we sold an Iron Condor on AUXL in anticipation of their earnings release this morning (Monday) before market open. As of 7:43 AM Monday morning the underlying has not traded any shares pre-market.  Reuters is reporting, “Q1 loss narrower than expected” at loss of $0.18 vs. an estimated loss of $0.32.

When you’re short an iron condor ‘no news is good news’.  The fact that no shares have traded premarket is a good sign to me but we’ll wait for the open to count our [drop in IV] money.

Here’s an interesting note on this trade:  Friday I checked the status of this trade between surgeries.  (Yes, I look at the market between surgery patients. No, it doesn’t affect the surgeries.)  Mid day this trade was losing over $1,300 because IV went up significantly.  We entered the trade for a credit of $1.05 per spread.  On Friday, I tried to sell an additional 25 contract spread for then current mid-price of $1.60.  That would have increased my credit to an average price of $1.325 per spread but it never executed.  Oh well, that’s part of the price for using a less liquid underlying.  At the close the spread was trading $1.25 at the mid-price (-$500).

I’ll update you some time today on the status after the market opens.

Leave a reply