Buy March $510 call for $19.00 and sell Feb $510 call for $13.20. This will cost you $580 per contract and on Feb option expiration day as long as Google remains between $467.20 and $560.88 (see below) you will make money. This is a no brainer.
Profit/Loss per contract:
Stock Price Profit/Loss
riskarbs: how did you calculate that Feb $510 calls will lose 1200 basis from 42 to 30 and March $510 calls will lose 300 basis after earnings? Is there a web site where you can calculate this information?
You're the same cat that stated Feb and Mar ops would open unch, lol.
The Feb 510 straddle req at exchange minimum margins was $12,000 initial. I know, I had small numbers of the $500 on in my personal account at interactivebrokers. Options express charges above exch minimum. And wtf computes return on margin?
I was making a statistical argument... you're still wrong. You bought impled vol into an implied vol disaster. Come back tomorrow and lets talk about your Feb/Apr 510 call spread.
Dude, at least get your bullsh*t vetted... APR isn't listed. I assume you meant to state Feb/Mar.
Regardless, vol will plummet tomorrow and you're LONG VOL. I see the spread at dead-money at best for Feb/Mar 510 call spread.
You're right that straddle would have made more money. But you are talking about "short straddle" that would have required at least $16,000 minimum capital requirement due to unlimited risk and limited return according to optionsxpress.
Per my calculation, I can unwind my $510 long call spread tomorrow for $6 and $14 (Feb/April). That is $8 difference and I paid only $5.80 for it, which is about 27% return.
The other thing to remember is that your broker would not allow you to transact a position that would create a uncovered short call in your account if you were not approved to trade short calls (uncovered).
One thing that you might consider is a collar which is where you sell a call to pay for the premium of a put. You give up some upside, however, the position can be rolled or closed. I wish you success.
I hope this helps.