Earnings play wrap up Q3 2010

Hi folks. My apologies for the lack of posts and poor notice. I just got back from holidays over in Malaysia. Anyway here is the wrap up of my earnings plays for Q3.

AAPL
2 x 290/280/260 Put BWB opened for $0.12 credit and closed for a $0.29 credit. Total return was $0.41.
2 x 360/370/290 Call BWB opened for $0.15 credit and closed for a $0.02 credit. Total return was $0.17.
Total return for AAPL was $0.68 on $9.32 of risk which gives a ROI of 7.02%

GS
4 x 150/145/135 Put BWB opened for $0.05 credit and closed for a $0.16 credit. Total return $0.21 on $4.79 of risk gives ROI of 4.38%.

GOOG
2 x 510/500/480 Put BWB opened for $0.69 credit and closed for a $0.02 debit. Total return $0.67 on $9.31 risk gives ROI of 7.2%

ESI
4 x 60/55/45 Put BWB opened for $0.13 credit and closed for a $0.49 credit. Total return $0.62 on $4.38 of risk gives ROI of 14.2%

AMZN
6 x 150/145/135 Put BWB opened for $0.41 credit and closed for $0.03 debit. Total return of $0.38 on $4.59 of risk gives ROI of 8.3%

NFLX 
8 x 140/135/125 Put BWB opened for $0.62 credit and closed for $0.05 debit. Total return of $0.57 credit.
8 x 175/180/190 Call BWB opened for $0.23 credit.
Adjustment of 4 x 185/190 call vertical for $1.48 debit. (bought)
Adjustment of 4 x 185/190 call vertical for $1.64 debit. (bought)
Adjustment of 6 x 175/180 call vertical for $0.34 credit. (sold)
Adjustment of 2 x 175/180 call vertical for $0.51 credit. (sold)

Total loss of $302 on max risk of $3320 gives ROI of -9.1%.

BIDU
4 x 115/120/130 Call BWB opened for $0.16 credit.
Adjustment of 2 x 125/130 call vertical for $0.37 debit. (bought)
Adjustment of 1 x 125/130 call vertical for $0.55 debit.
Sold 3 x 115/120/125 call butterfly for $0.42 debit.
Sold 115/120/130 call BWB for $0.30 credit.

Total gain of $91 on max risk of $484 gives ROI of 4.7%.

PCLN
4 x 330/320/300 Put BWB opened for $0.55 credit.
Adjustment of 2 x 310/300 Put vertical for $0.48 debit.

Total gain of $124 on max risk of $3780 gives ROI of 3.28%.


Q3 EARNINGS PLAY SUMMARY

Total gain was $743 (not including commissions which was significant $198 and that's after I'm on a significant discount with TOS). Total return therefore was $545 and average ROI on the positive trades around 6.5% (although based on actual margin requirements, it would be only 3.25% due to current FINRA rules).

Closing remarks: The profitability versus the probability payoff seems to be right on the money here. Most of my long options were placed right at or just beyond the 1st deviation mark with my breakeven around the 2 std deviation mark (95%). Therefore I had a high probability of these trades working out for me (20:1 odds). Therefore you could say that the 6.5% ROI is about right given I had about 95% odds in my favour.

Is the effort worth the reward you might ask? Knowing that all it takes is one of these tickers to move way beyond the breakeven for all the good work to be undone. I don't know. I have the feeling that it is more hardwork than it is but in the context of the current options income trading conditions, finishing in the black on any income strategy from what I can gather is a pretty rare occurrence these days. Will I continue with this strategy into Q4? Probably given that I still some edge and there is always the off chance that I will be able to get more than a one strike separation from my long to short option and so extract greater value (hit a home run). I will probably mix it up a bit and use weekly options where I can (GOOG, GS and AAPL). Also I will not forget to add RIMM, MA and ISRG to the tickers above as these are the other ones I normally trade as well.