Earnings Beat – FFIV Trade Update #1

Market Context
Good day Insiders,

Recall yesterday we placed our trade in FFIV and now its time to take our risk out of the trade, all of it! You read that right we are going to let the market do what it wants tomorrow and let’s see where we end up. Our exposure is with and at the 143 strike, so we are simply going to buy it back as it is going for less than 0.05. Executing this will get us our margin back. The margin, of course, was used in selling the put spread and the short side of the unbalanced condor.

The Trade
Simply buying the 143 puts back.

Risk & Reward
Buying the 143 puts back for 0.03 allows us to have a graph like this (below). Given that we do not know what tomorrow brings if by chance it is volatility, could it be Christmas in January!? Unlikely to the level we would like (a large drop in 1 day) but this is all about protecting money and mitigating risk.