The secret to buying pre earnings straddles

[Kim Klaiman]

The best time to buy a straddle to catch the ramp before earnings is right after an earnings call in anticipation of the next earnings call. Be sure to buy enough time to capture the next earnings date. No reason to over think it.

This is way too early for few reasons:

1. IV increase rarely starts before 20-30 days before earnings.
2. The negative theta will start to hurt the trade right away.
3. If you go that far (~3 months), the effect of positive gamma will be pretty small.
4. For most stocks earnings date is not confirmed that early - usually it is few weeks in advance.

 

[destriero]

The best time to buy a straddle to catch the ramp before earnings is right after an earnings call in anticipation of the next earnings call. Be sure to buy enough time to capture the next earnings date. No reason to over think it.

Worst advice ever.

 

[El OchoCinco]

The best time to buy a straddle to catch the ramp before earnings is right after an earnings call in anticipation of the next earnings call. Be sure to buy enough time to capture the next earnings date. No reason to over think it.

Quiet, the adults are talking....

 

[SmallFry]

Yep, says Aug 23rd

Where is this? I did not see any new press releases.

 

[markuzick]

The best time to buy a straddle to catch the ramp before earnings is right after an earnings call in anticipation of the next earnings call. Be sure to buy enough time to capture the next earnings date. No reason to over think it.

I took this to be sarcastic humor and was shocked that everyone else believes you're serious - are they correct?

 

[EvanDM]

Where is this? I did not see any new press releases.

Bloomberg.com that might not be a confirmed date.

 

[TheBigShort]

Quiet, the adults are talking....

El it looks like our strat would have worked. Sell the straddle on M close first thing in the morning and then open a new long straddle to take the intraday move. I mean everyones hindsight book is up 1000% but I think we broke it down pretty good.

 

[Kim Klaiman]

El it looks like our strat would have worked. Sell the straddle on M close first thing in the morning and then open a new long straddle to take the intraday move. I mean everyones hindsight book is up 1000% but I think we broke it down pretty good.

M straddle implied 9.3% move as of yesterday close. It is now down 14%. How selling a straddle was a good move?

 

[TheBigShort]

M straddle implied 9.3% move as of yesterday close. It is now down 14%. How selling a straddle was a good move?

Are you having trouble reading Kim?

 

[destriero]

M straddle implied 9.3% move as of yesterday close. It is now down 14%. How selling a straddle was a good move?

Do you have access to r/t quotes? The shares were above $38 during the first 30 minutes of trading.

TBS nailed it. Pre-report straddle was down in price and the post-report straddle is up. Other than precognition--he couldn't have predicted the move any better.

Keep clowning.