You said it yourself. Even how clumsy it could be, a dumb copy and paste.
Ex Post Black Swans are said, by bullshiters, to be fairly predictable.
Here is an excellent example of the narrative fallacy.
LinkedIn Iron Condor Gone bad.
- Thread starter skvaith
- Start date
Ex Post Black Swans are said, by bullshiters, to be fairly predictable.
Here is an excellent example of the narrative fallacy.
I'll try to add some advice as to how I dealt with a similar situation( not options but stock).
I got caught in a earnings drop not long ago in a company that I believe is crosslisted, AYA( I'm Canadian). Their the owners of a few online gaming softwares like poker stars.
Anyways, in my head I had a mental note to avoid earnings releases. I trade on the daily chart and hold for a few days to a couple weeks on average. I have no edge in earnings and consider it gambling( I don't know enough to understand fundamentals and Balance sheets and cash flow, for myself it's gambling, others maybe not)
Anyways day before earnings, was going to sell, however it made a decent move that day with some heavy volume especially at the end. In my mind was " Huh, well maybe smarter people know something". Anyways held on for some reason and the market opened up like 27 or 30 percent down. Manage to get out in a few hours at like a 23 percent loss.
Now this is in my formal trading plan I have written up and a picture of the trade on a chart is with it showing what can happen.
This does work both ways I guess, up or down, but unless you know something or this is taken into account for your trading style I'd avoid these earnings dates.
I myself wouldn't consider them black swan with the current market volatility. Theirs plenty of charts with huge up and down moves from earnings this quarter.
Just some advice from another trader, learn from the experience, analyze it, come up with a plan.
My solution was not to hold a trade through earnings and not to take a entry signal within 5 days of earnings. Maybe this plan will change someday if I get to do some back testing on it and market volatility contracts.
As you said earlier you were ready for the loss which is good. I've been trading for about 6 months and trade small enough that I feel no pain on my losers. I have no reason to put on big positions. Looking for consistency in my trading and routine first
I got caught in a earnings drop not long ago in a company that I believe is crosslisted, AYA( I'm Canadian). Their the owners of a few online gaming softwares like poker stars.
Anyways, in my head I had a mental note to avoid earnings releases. I trade on the daily chart and hold for a few days to a couple weeks on average. I have no edge in earnings and consider it gambling( I don't know enough to understand fundamentals and Balance sheets and cash flow, for myself it's gambling, others maybe not)
Anyways day before earnings, was going to sell, however it made a decent move that day with some heavy volume especially at the end. In my mind was " Huh, well maybe smarter people know something". Anyways held on for some reason and the market opened up like 27 or 30 percent down. Manage to get out in a few hours at like a 23 percent loss.
Now this is in my formal trading plan I have written up and a picture of the trade on a chart is with it showing what can happen.
This does work both ways I guess, up or down, but unless you know something or this is taken into account for your trading style I'd avoid these earnings dates.
I myself wouldn't consider them black swan with the current market volatility. Theirs plenty of charts with huge up and down moves from earnings this quarter.
Just some advice from another trader, learn from the experience, analyze it, come up with a plan.
My solution was not to hold a trade through earnings and not to take a entry signal within 5 days of earnings. Maybe this plan will change someday if I get to do some back testing on it and market volatility contracts.
As you said earlier you were ready for the loss which is good. I've been trading for about 6 months and trade small enough that I feel no pain on my losers. I have no reason to put on big positions. Looking for consistency in my trading and routine first
There is no greek exposure, save for delta. There is no risk of holding it into expiration as you're at max loss (unless between put strikes at exp.). You'll be well off of max loss if spot is between strikes near expiration, so just cover rather than take the assignment. Obviously it is very unlikely that the shares will trade inside those two put strikes.
What you have is an bull vertical at this point (unless LNKD traded towards neutrality, which isn't going to happen).
You may want to think of it as a 50/55 call spread. The 50/55 ITM put spread is equivalent to the 50/55 call spread (box-arbitrage).
I need to state this... you should not be trading anything but sim if you think this can be fixed.
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the first 2 conditions were not met therefore it is not a black swan event. therefore your post is irrelevant.
You can try to roll the negative leg to the next month. After this, you will have a vertical spread deep ITM. Sometimes the price of the shares returns back within a few weeks. So maybe you'll have some of your money back.
Can you please explain?Buying and/or selling ITM spreads is pointless.
I have tried to use option earning strategy for long time. Lnkd is not on my list because its historical data (the price AMC or BMO)is so bad for doing iron condor. That is, i usually find good underlying stock to play earning. My measure is focus on IV crush and delta moving after ER based on historical data. Also, you should know your risk. Hope it can help you
I agree and it was definitely 1 in 1000.LNKD's drop wasn't earnings related. I would consider it a black swan event.
I always love it when someone asks this question about a position that is a losing one. Attention all traders, with all due respect... if you are asking the above question you should not be putting $0.01 into any trade at all because you lack the fundamental knowledge of risk. Sorry but 'tis true...