Earnings & Events-Related Option Plays

Hey Pizza Boy! (g). Since we picked up the idea from Born29 on Yahoo (IV Trader here), I have become a big fan of ratioed double reverse calendars 1-2 weeks before expiration (sounds like a bad Olympic dive with 7.2 difficulty). Sometimes I add a next strike OTM kicker to soften the effect of the extra short legs.

Everything has risk but these don't have a lot if you blow out ASAP after the quarterly EA.

Spin
 
Do you wait until just before closing on the day of the EA? I did an IC on GOOG last week with about 2 hours to go. It then proceeded to move up. If I had waited until 15 minutes before the close I would have moved the strikes up 10 points and done better. [/B]
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And sometimes, not waiting is worse. You watch the price and when it's acceptable, you take it. Skip the 20/20 hindisght. Sometimes, EA plays offer better prices a day or two earlier. Sometimes, it's near the close. You never know. And once in a looong while, late day IV change makes it worthwhile to get out before the EA.
 
Quote from spindr0:

Hey Pizza Boy! (g). Since we picked up the idea from Born29 on Yahoo (IV Trader here), I have become a big fan of ratioed double reverse calendars 1-2 weeks before expiration (sounds like a bad Olympic dive with 7.2 difficulty). Sometimes I add a next strike OTM kicker to soften the effect of the extra short legs.

Everything has risk but these don't have a lot if you blow out ASAP after the quarterly EA.

Spin
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Spin,

Good to see you are still "ordering takeout." :)

The ratioed double reverse calendar. I think I know what you mean. You'll have to share an example (real or hypothetical) so that the rest of us mere mortals understand for sure what tricks you have up your sleeve.

I'm not doing too many of these earnings plays any more, mainly index plays.

Watch your neck for those dives. :)

AZD
 
I got sent through the buzzsaw playing FFIV into earnings back in April. I did a condor that was waaayy out of the money, only to have the stock rise something like 20% after earnings announcement and blow through not only my short strike, but the long strike of my calls. This worked extremely well back in January when the stock didn't budge after earnings, but the skew was 40 or 50 points. I got greedy and paid the price!

Quote from arizonadreamer:

FFIV is always good for "entertainment." Reports after market close today.

I am considering a play . . . will post if I do anything.

AZD
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Quote from Div_Arb:

I got sent through the buzzsaw playing FFIV into earnings back in April. I did a condor that was waaayy out of the money, only to have the stock rise something like 20% after earnings announcement and blow through not only my short strike, but the long strike of my calls. This worked extremely well back in January when the stock didn't budge after earnings, but the skew was 40 or 50 points. I got greedy and paid the price!
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Div_Arb,

That's just it. What works well for a while suddenly doesn't work. These announcements are difficult to predict (the actual data and the market reaction to the data) and it is usually best to enter with a small position. At least you weren't 100% uncovered with those calls!

AZD
 
Anyone going to BIDU today?

I would also like to see an example of the reverse double-triple twist backflip with a kick.

Is that anything like a batman trade, but with the time spread thrown in?
 
Folks, look at WCG.

Around 43.6, down over 71. But the way OTM calls have bids. .50 for the Nov 90 calls. NOT a recommendation for anything, but for those inclined to take on this type of unpredictable risk (hey, what's a raid or two?), then it should be interesting.

AZD
 
Quote from Eliot Hosewater:

Anyone going to BIDU today?

I would also like to see an example of the reverse double-triple twist backflip with a kick.

Is that anything like a batman trade, but with the time spread thrown in?
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I am waiting to see what the IV and underlying are doing < 30 minutes or 1 hr before the close. Yes, Spin's acrobatic activities would be interesting to witness here.

AZD
 
Quote from arizonadreamer:

I am waiting to see what the IV and underlying are doing < 30 minutes or 1 hr before the close. Yes, Spin's acrobatic activities would be interesting to witness here.

AZD
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Update: I decided to do a 2:3 ratio on the Nov 460 calls and 470 calls for a small credit. Just going for pizza money.

AZD
 
Quote from arizonadreamer:

Update: I decided to do a 2:3 ratio on the Nov 460 calls and 470 calls for a small credit. Just going for pizza money.

AZD
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Good luck.....Looks like your trade is the only BIDU live trade, I'm just watching.
 
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