Trading the Volatility Smile on Earnings

[Atikon]

You can't hedge your position overnight when the first move after the news is 10%. Look what happened to NFLX. Your CFD is going to be wide af and you ended up hedging at 480 (after the first move). NFLX is trading at 430. You are long a boat load of shares at 480. What do you do now?

Frist off, I didn't open a CFD on Netflix. Second, If I had sold a Call that would be at e.g. 470 ITM, I would set a sell to close/stop loss at around 468-466, so if it bounces back the CFD will close. The risk for me is, a)not getting filled, b)that the Stock will bounce around my strike price. You can calculate the odds that the post Earnings stock price will bounce around at the 1 STDV. They are very slim and if it happens I have to cover the spread like I would have to anyways. Regarding a) see the image attached (Page 4) on the buy/sell activity that wen't on in the SECONDS! that the Earnings Report has been released. I would have bought on the way up and sold when it came crashing down.

 

[PoopyDeek]

Dump Truck, you cannot block someone who has already blocked you. So more of your BS. No, I don't trade CFDs because I have a Big Boy account.

You are allergic to money. Stop trading and procreating.