Short calendar spread with puts?
https://www.fidelity.com/learning-c...ons-strategy-guide/short-calendar-spread-puts
https://www.fidelity.com/learning-c...ons-strategy-guide/short-calendar-spread-puts
Directional trades prior to earnings
- Thread starter oldmonk
- Start date
Robert Morse
Sponsor
The following link is from CML TradeMachine. The video which goes over non-directional (long straddles) and the statistical significance behind it, especially if the the prior earnings move was a gap down.
Link to the product is https://cmlviz.com/register/cml-trademachine-pro/
IMO, the cost of software like this pays for itself for the active options trader. I wish I had access to this when I was a market maker.
Bob
For some reason the CML Viz video that Robert is trying to share can't be shared on ET.
This video from CML Viz explains their strategy - for $130.00 a month it might be worth looking into.
This video from CML Viz explains their strategy - for $130.00 a month it might be worth looking into.
Robert Morse
Sponsor
Thank you for reposting but you can still click on the link that says "Watch on Vimeo". On sale to day, "Get CML TradeMachine™ Pro for only $89/mo. (normally $129/mo). "
BTW, I get no payment for pointing this sale and website out. Just helping provide tools for traders.
Thank you.
That's one of the strategies that CML Viz covers in their video.
Except for waiting for the stock to pull back - which I don't think would be a good idea.
With earnings upon us now is a good time to buy OTM calls:
- GOOGL
- FB
- AMZN
- AAPL
- NFLX
- TSLA
- QQQ
1 trillion dollar market cap - will one of the techs get there this time around?
This is a very interesting thread that I think has some merit because I have done the reverse and it has not worked. About 3 years ago (for 2 quarters in a row) I thought it would be possible to take advantage of the Vol Crush that happens once earnings have been released. So I sold out of the money Iron Condors in volume every day in the last hour of trading prior to earnings release. I would have large positions on every stock that had enough option activity to take a position.
So, for about 6 weeks in the heat of earnings season I would be putting on 20 to 25 positions every afternoon then taking them off they next morning. Of course most of them stayed within my IC range and ended at at a nice profit but the max losses happened more often than I had imagined.
My loss was limited because of the protection on the back end of the IC but there were so many earning surprises that went so far beyond my protection that I developed a theory that I will test out on Demo sometime that you can profit by buying OTM calls and puts prior to earnings and the windfall gains on the big surprises will give an overall profit even while the vast majority of my positions would expire worthless.
I ended up losing about 25K over those two quarters so if selling prior to earnings does not work then possibly buying may work.
So, for about 6 weeks in the heat of earnings season I would be putting on 20 to 25 positions every afternoon then taking them off they next morning. Of course most of them stayed within my IC range and ended at at a nice profit but the max losses happened more often than I had imagined.
My loss was limited because of the protection on the back end of the IC but there were so many earning surprises that went so far beyond my protection that I developed a theory that I will test out on Demo sometime that you can profit by buying OTM calls and puts prior to earnings and the windfall gains on the big surprises will give an overall profit even while the vast majority of my positions would expire worthless.
I ended up losing about 25K over those two quarters so if selling prior to earnings does not work then possibly buying may work.
What I was doing was selling the put and the call at approximately the expected move of the option to expiration (as shown on the TDA TOS platform option page) then buying protection per the definition of an Iron Condor. It just did not work.