If you see it above 120, say around 122-123, re-short it for lower lows.
Earnings - NFLX, GOOGL, AAPL, MSFT, CMG, AMZN, FB
- Thread starter OTM-Options
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If you see it above 120, say around 122-123, re-short it for lower lows.
COH beat
KATE and RL reporting in the morning
if KATE and RL beat, i'm going long KORS into ER
KATE and RL reporting in the morning
if KATE and RL beat, i'm going long KORS into ER
FIT slaughtered despite beat
GMCR annihilated
GMCR annihilated
out @ 42.64
Does anybody ever trade strangs on the 2 weeks pre-earnings, to close before announcement? Strategy tips or ideal stocks for this trade?
I've backtested (TOS - pretty minimal) the strategy for GOOG - and it worked very well. Less so for NFLX, AMZN, etc. only for GOOG. I've traded it several times and it won every time. Goog seems to move pre-earnings. Of course, premium loss is lower after the options start to gain IV. So this lowers the trade risk quite a bit. And the stock moves sometimes significantly as the MM and commercials take positions pre-earnings.
Thoughts?
I've backtested (TOS - pretty minimal) the strategy for GOOG - and it worked very well. Less so for NFLX, AMZN, etc. only for GOOG. I've traded it several times and it won every time. Goog seems to move pre-earnings. Of course, premium loss is lower after the options start to gain IV. So this lowers the trade risk quite a bit. And the stock moves sometimes significantly as the MM and commercials take positions pre-earnings.
Thoughts?
Strangles/Straddles are too expensive and it's rare for the underlying to move enough to get a profit. But the proof is in the pudding and you will have to wait till next earnings to get a definitive answer. Keep an eye on GOOGL (or any other stock) and see what happens.
Not a bad idea. For anyone who has sold a horizontal spread with both strikes behind the earnings report ( Wasn't me. Just somebody I know
), your options will hold value due to the rising IV going into earnings even though the model implies the daily accrual of theta gains (which are illusory, btw).Still, you are making a speculative bet on where the underlying will go leading to earnings. So, a short broken wing butterfly timed to the volatility cycle might be more prudent. If a rare pre-announcement event occurs, you will probably realize a nice gain with an easy exit. Unfortunately, the market has been in a range for the past six months making a lot of these flys a loosing trade.
To hold past the earnings event is obviously another strategy which has been discussed endlessly.