Heads up - AAPL earnings are tomorrow, Tuesday October 27.

[OTM-Options]

Upside calls = obliterated.

Buy lottery tickets (OTM options) during earnings = silly

Did you even follow the earnings?


FYI ....... AAPL OTM calls were not "obliterated", they lost only about 50% after earnings, and they still have some life in them. I'm referring to the Oct30 120.00 calls, which were 5-strikes OTM pre-earnings. Check out my thread last week: Heads Up - AMZN, GOOGL, MSFT earnings - QQQ weekly calls

Do you think +500% on MSFT calls and +1000% on QQQ calls is silly? And that is if you entered a day early, on Wednesday - if you entered on Thursday the returns would have been much higher.

 

[destriero]

Yeah, only 50% loss. Good call.

 

[OTM-Options]

Yeah, only 50% loss. Good call.

Unrealized.

 

[Victory5]

Unrealized.

They have expiration dates and hoping that the market is going to hit your expectations consistently is not a winning strategy IMO.

 

[OTM-Options]

They have expiration dates and hoping that the market is going to hit your expectations consistently is not a winning strategy IMO.

All option positions rely on the market/underlying preforming to the traders expectation - otherwise the position could lose money. That's the nature of a volatile product such as options, you can't avoid risk.

 

[Victory5]

All option positions rely on the market/underlying preforming to the traders expectation - otherwise the position could lose money. That's the nature of a volatile product such as options, you can't avoid risk.

But you can manage it. Im not arguing you might not make money simply buying calls or puts, but it leaves you open to perhaps more risk than is needed.

How profitable has your strategy of playing option earnings moves been? Because in order to justify the risk that you undertake, they ought to be massive or else its not a wise choice....

 

[lawrence-lugar]

Yeah, only 50% loss. Good call.

-- OTM-Options has a history here of making poor judgement calls or gameplans or strategies... he must be bankrupt by now.

 

[Autodidact]

-- OTM-Options has a history here of making poor judgement calls or gameplans or strategies... he must be bankrupt by now.

I agree there is no edge or very little edge here but his transparency is an example to many, and for thay he should be commendable.

It takes guts to post your trades before the fact knowing aholes in ET will be there waiting to devour you.

Little or no edge but honest and ballsy and for that he has my respect.

 

[donnap]

Well, it's either lottery tickets or there may be some kind of theory behind it.

Many moons ago, I read McMillan On Options. In my edition, he quotes a trader who said that the only good option to buy is an expensive one. McMillan points out that you'd go broke without some sort of discretion.

The theory is that overall, options often underprice events. Using discretion you may be able to isolate the opps. It would still follow the general pattern of buying options. Many losers and a few big winners.

I'm not saying that this is a viable trading strategy or that OTM is trading it. I have no idea. Obviously, one could make a lot of money if one could do this.

OTM made over 5K on one of those little trades a few years back. I know that his costs are high. Why wouldn't you stay with IB? Activity fees?

OTM's trades are fun to follow and they bring a lot of posters out. It's kinda like going to the circus.

 

[OTM-Options]

Upside calls = obliterated.

Yeah, only 50% loss. Good call.

-- OTM-Options has a history here of making poor judgement calls or gameplans or strategies... he must be bankrupt by now.

lawrence-lugar ............ destriero is pulling the wool over your eyes, you got to learn to think on your own. Even though my call didn't go as planned it was still a good call - there was plenty of opportunity in being long the 115 to 120 weekly calls before and after earnings.

It's all in timing and strike selection - the 120 calls was a tad too aggressive before earnings, but did very well after earnings. The upside calls were not "obliterated".

• Below are seven 5-day charts from October 26 to 30.
• The top chart is for AAPL.
• The other charts are the 120, 119, 118, 117, 116 and 115 weekly AAPL calls.
• The green dots represent the day of AAPL's earnings - just before market close.

Any questions?