As you can see from the below 5 minute chart of SNDK I managed to enter my trade right near the bottom yesterday at $35.93. SNDK then rallied (with the rest of the market) up to close at $36.69, up 2.1%.
This puts us much closer to the upside breakeven and short much more delta going into earnings.
This morning SNDK gapped up and is currently trading up 2.25% at $37.51.
I am considering adjusting this trade to become delta neutral and short Vega, or perhaps just take a small loss and move on… BTW: yes, delta neutral, I’m thinking of giving up on the short delta position as this market seem like it’s constantly bullish.
To adjust, I will likely add an OTM call calendar spread. I’m looking at the May / Oct $39 call strike and will use enough contracts to make us delta neutral. At the current price this will be 26 contracts.
The combined trade looks like this:
I’ll keep you updated.