nasdaq.com also has earnings history for free Then it’s quite possible to take that information and look at charts and see if the follow through is more than a day or not, often times the follow through lasts more than a day.
50/50 with greater than 2/1 R/R works for me, usually look for 3/1 plus on earnings. Other factors come to the equation like how often does the company beat, what’s the consensus going in. What has this earnings season brought, more positive surprises, how about the surprises within the sector etc. Apple has a tendency to surprise upward, BS earnings and forward outlook were priced in. So the statistics favor Apple while the consensus was against what’s statistically favorable. Then you’d look at the price action and see what’s truly possible. AAPL was towards the bottom of a trading range with plenty of upwards potential to the top of the range. So in my case you’d go in and find a vertical that would have reasonable price targets. Apple top of the range was $180 so I went in and chose 170-175 as this was well within the PA you could expect Apple to move. A spread of 5.00 on a 170 stock represents a mere 3% move required. Although this spread was slightly OTM when I purchased it so needing a 4% move. Why a vertical debit spread because options tend to have a volatility crush. The option I was long would decrease in IV value but so would the one I was short mitigating the issue.
Sure it was still a directional call but then you get into condors and butterflies to avoid the directional bias. Those are expensive and those are when big moves are necessary R/R selling or buying those isn’t really my taste. All said and done and all factors considered I’d say I’m okay with my 50/50 gamble.
