Trading Call/Put Options Around Earnings Is Exhausting

[IV_Trader]

Quote from Don87109:

IV,

What do you mean when you say "buying TARGET vols"? I assume you mean volatility, but I am not sure what TARGET means.

Also when you say after the open I assume you mean after earnings release, right?

Don

Hey , Don. Yes , volatility , if IV brakes pre-report levels . This will happen often because all speculators ( that bought yesterday) are trying to dump vols at the open at any cost. If you can get it at the bottom , you will have :
1. Possible bounce in IV
2. Seven hours of unusual high stock volume action( vs any other day)
3. Possible press conf at noon ( a huge plus) that can swing price

All this spells out for potential GAMMA SCALPING PARADISE.
Not so simple as it sounds , of course , but worked for me most of the times.

 

[Don87109]

Quote from IV_Trader:

Hey , Don. Yes , volatility , if IV brakes pre-report levels . This will happen often because all speculators ( that bought yesterday) are trying to dump vols at the open at any cost. If you can get it at the bottom , you will have :
1. Possible bounce in IV
2. Seven hours of unusual high stock volume action( vs any other day)
3. Possible press conf at noon ( a huge plus) that can swing price

All this spells out for potential GAMMA SCALPING PARADISE.
Not so simple as it sounds , of course , but worked for me most of the times.

Thanks IV, you da man.

Don

 

[RL8093]

Quote from ByLoSellHi:

I am filtering through all companies that are reporting earnings this week, comparing them against certain screens, and playing their earnings with call or put options.

This is the first time I have done this so systematically, and it is extraordinarily time consuming.

Does anyone have any comments as to whether or not this is good, poor, or alpha neutral strategy, on balance?

ByLo,
Just curious if the direction / content of the thread is what you intended? It seems to be focusing more on playing the IV pre-E. I got the impression, you were asking about the plays post-E....

 

[spindr0]

Regardless of what approach you have with earnings plays, you're right - it is extraordinarily time consuming. I have reduced the time spent by screens such as minimum stock price, minimum IV, etc. I also avoid most non-Naz stocks because supporting positions in the pre/post market is tough with the 3 letter critters. And working with someone else with similar interests cuts it even more. But it's still a massive job.

I guess that I trade the vols via various spreads (not quite sure what the correct terminology is). Lotsa small losers but an occasional big one like AMZN, FFIV, BIDU. Not a get rich scheme but if it beats MM rates each year, I'm happy.

As for your question of whether it's a good strategy, it all depends on if it works for you. Everyone has different talents, tolerances, etc. so just try to find something that fits your comfort zone.