Linkedin (LNKD) has made a great move in the last month from 109 to 126.
Right now, its trading at 125.8, but it trades in $5 strikes, so to get a straddle or strangle will skew the Delta to one side.
The Weeklys expiring this week have premium, so the trade is Short Straddle, but the contracts are skewed to achieve 2 things –
1) A fairly Delta neutral position to start with
2) Give it a bit more room to the upside due to the momentum that’s already built in
The Trade is – Short 125 Put / short 125 Call
Contracts 22 on the Put side, 20 on the Call side
Premium received = $8200, Margin = 60K
Return possible = 8% in 4 days (will hold till expiry if position is in safe zone)
Days left – 4 including today
Breakevens – 121 and 130 (approx)
Check Figure below