And Macy's was still above $38 @ 9:40AM... When I do straddle on earnings at 9:30AM I am in front of computer ready to trade so 10 minutes is more than enough time to catch the IV drop and still profit despite the open.
The secret to buying pre earnings straddles
- Thread starter TheBigShort
- Start date
You could have bought the thing all day at 3.15. It looks like the 40 went off at 4.35 yesterday. 27% gainer.
Again, selling 40.5 would be directional as the stock closed at 41.82 yesterday. Looking at 42 straddle would be the right way to look at the strategy.
Last 3 cycles M was actually UP double digits, so selling below the strike would really hurt you.
The challenge of course is posting REAL trades in REAL time based on REAL fills. Not hindsight. Not hypothetical prices.
This is what I do all the time. Lets see you doing it. In REAL time, with screenshots of your REAL fills.
It looks like you don't have much experience of holding trades through earnings. In the first 15-30 minutes, the spreads are HUGE on most stocks (except for the most liquid ones) and you have zero chance to get filled anywhere close to the mid.
Next time you do it, I challenge you to post your real fills, and we will compare them to the mid.
Spreads impact buyers of vol as much as sellers.
Not really.
1. The 40 straddle is not representative because it was 4% below the stock closing price.
2. The 40 straddle price closing price yesterday was 4.05. It fluctuated all the day between 3.85 and 4.20. Never 4.35.
3. 27% gain? Not really. This trade would require around $830 in margin, so even based on your calculation, it would be 15% return on margin. Learn to calculate P/L properly before pretending to be an options expert.
I'm done here.
LOL this is coming from the guy who wont post their 86% CAGR returns your always bragging about or even post 1 pre earnings long straddle trade. Your a joke.
If your short going into earnings you will have no problem getting a fill in the morning. I have no problem posting my fills, unlike you Kim. If your challenging me that means your in on the challenge. Can't back out now. I'll post one so you have to post one. If you dont your just going to look like a fraud infront of everyone on this forum(if you dont already).
You are going to tell ME the right way to do this strategy? I listed the straddle that I recommended was the one to buy and quited its best ask price. I picked below then current price of the stock because of the price chart and also because of skew/range.
And I did do real calendars on this stock posted in real time and closed.
OK I see the approach here make up rules.
Who the hell said the rule was sell the ATM straddle? You cannot tell me it is NOT representative because it does not fit your narrative. I don't tell you what strike to buy. So you negate the issue by waving your hand and saying the 40.5 straddle was not representativ because it was below the stock price...
I picked the strike for this discussion and gave the rationale for it (which was right by the way) and I used the same rationale for my 2 calendars.