GOOG - Earnings this Thursday - Buy OTM weekly calls on Thursday

Quote from FXforex:

Update: I am considering the GOOG 10-19-13 930 calls at about $3.00, current price $4.50. :)
Next Update: Thursday at about 3:30 PM EST.
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Bought 1 GOOG 10-19-13 930 call @ $2.95
 
Quote from RichardRimes:
mm move is predicting 31 pts...hate to say it but a 84% probability of losing + commission costs...
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(a) 3.7% B/E is lower then both mean and median historical earnings moves.
(b) naive ranking of 3.7% in the historical earnings is ~20th percentile (28 of 36 obs higher).
(c) Z-score (b/e - mean)/sdev is -0.35.

Sorry, maybe I am being slow here - where do you get 84% probability of loss?
 
Soo... 939ish after the close, i presume the OP is selling delta to lock in his gains :)

PS. I was long the 890 calls against delta, so I got roughly a b/e move but it did look like a cheap lottery ticket.
 
Quote from gulatin2:

If you look at Implied vol across different tenors, vol is priced in the cheapest for GOOG heading into earnings tonight. ATM straddle is pricing 3.6% move as opposed to 5.7% average move , this stock has experienced over the last 14 qtrs.

Now the question to ask is - Is the vol priced low for a reason or its again a mis pricing . Average of downside move -5.5% and avg for upside moves is 7.15%

As they say in the world of options trading- option are meant to be sold and not to sell.. This time it definitely reflects that premium sale is more risky as GOOG reports earnings tonight
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Could not make it in time for the close. Man I hope you made some serious coin on this. Great analysis and spot on. The straddle was a no-brainer buy today. Might end up being a 2 bagger.
 
all I can saw is WOW...still not a smart strat over the long term...but ENJOY your winnings at the GOOG racetrack..

sle just a back of the envelope peek at delta of the 930...

:)
 
Quote from RichardRimes:

mm move is predicting 31 pts...hate to say it but a 84% probability of losing + commission costs...why make these really stupid (no offense meant) calls?


As already mentioned buying calls just before earnings is one of the most consistent losing strats there are. and I do agree with the above comment I would not be a seller into this either.
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Those probabilities are meaningless on a per case basis. You can drown in an average 1" pond of water.
 
Quote from sle:

Except some idiot (yours truly) sold delta way too early... :(
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If you knew when to hedge you'd be Steve Cohen. Being long options doesn't make you any smarter than you'd be at random.
 
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