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.