February 21, 2020 - MDT Alert (IRBT)

Unfortunately, IRBT did the worst thing possible for buyers of options. And that is, it did nothing.

I suggested the trade based on the fact that I thought it would follow through to the upside, but that has not happened.

And with the stock trading right around our strike price, going into the last week of expiration, the options will lose time value.

I would prefer to recoup some of the investment.

Let's go ahead and close the deal.

Sell to Close (2) February 28th - $52.50 calls @ $1.10. The 2 calls will net $2.20

Sell to Close (1) February 28th - $52.50 put @ $2.20

The total credit will be $4.40 per straddle.

The total debit when initiated was $7.30 per position, resulting in a loss of $2.90 per straddle.

Based on the suggested 2 lot, the loss will be $580, or under 1% of the nominal portfolio.

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