Overnight Profits In Semis

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Hey 5-Star Trader,

“Tuesday Trade” Journal: One of the most important concepts in trading is to review your work, and learn from the good and the bad. Identifying what is working is critical — to do more of it. So, to lead by example, each Tuesday, you’ll get a trade from my trading journal, in which I explain my thought process from start to finish. Trading is all about finding something that works and applying it over and over again. That’s how you find trading success. So study up on this “Tuesday Trade” and let’s get to work.

For this week’s “Tuesday Trade,” I want to outline my trade-in Marvell Technology MRVL.

Not to be confused with superheroes, MRVL is an American company that specializes in the development and production of semiconductors. Last week, they were set to report their earnings and I knew I wanted in on the overnight action right before they released their numbers.

On August 26, I sold two iron condors of MRVL — SELL -2 IRON CONDOR MRVL 100 (Weeklys) 27 AUG 21 63/68/63/58 CALL/PUT @3.21 limit order (LMT).

The idea behind this trade was to cash in on MRVL implied volatility (IV). If everything went according to plan, there would be an overnight volatility crush and theta decay. If this were to happen, I could come back the next day and buy back MRVL for a 30-50% profit on the credit.

Pictured below is my entry for MRVL:


Because this was an earnings report trade, the move would have to happen overnight, making this a riskier trade overall. The total risk I was taking on was 1.2%.

The very next day, near the market open, I was able to buy back MRVL for a profit — BUY +2 IRON CONDOR MRVL 100 (Weeklys) 27 AUG 21 63/68/63/58 CALL/PUT @2.06 LMT.

I love trading overnight moves because of how fast you can get results but, always remember to mind your risk!

Interested in improving your options trading? I’ve partnered with Benzinga to offer you my “Options 101” course at an exclusive discounted price. In this strategy package, I’ve outlined fundamentals and solidified key concepts into one concise class. Click to learn more!

Image by StartupStockPhotos from Pixabay

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

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