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Showing results for tags 'earnings'.
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As a reminder, a strangle involves buying calls and puts on the same stock with different strikes. Buying calls and puts with the same strike is called a long straddle. Strangles usually provide better leverage in case the stock moves significantly. So let’s see how it works. First, you must...
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About six months ago, I came across an excellent book by Jeff Augen, “The Volatility Edge in Options Trading”. One of the strategies described in the book is called “Exploiting Earnings - Associated Rising Volatility”. Here is how it works: Find a stock with a history of big post-earnings mo...
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Here is how their methodology works: In theory, if you knew exactly what price a stock would be immediately before earnings, you could purchase the corresponding straddle a number of days beforehand. To test this, we looked at the past 4 earnings cycles in 5 different stocks. We recorded...
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The reason is simple: over time the options tend to overprice the potential move. Those options experience huge volatility drop the day after the earnings are announced. In many cases, this drop erases most of the gains, even if the stock had a substantial move. In order to profit from the trade whe...
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In this article, I will show why it might be not a good idea to keep those options straddles through earnings. As a reminder, a straddle involves buying calls and puts on the same stock with same strikes and expiration. Buying calls and puts with the different strikes is called a long st...
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For this reason, front month expirations will generally have higher IVs than back months. After earnings, the implied volatility falls more in the front months than in the back months for this reason. There are various measurements to view this effect. Measuring the effect starts with...
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So if options are on average overpriced before earnings, why not to sell those options and hold the trade through earnings? There are few ways to sell options before earnings to take advantage of IV crash. One if through an Iron Condor. Many options sites do this strategy on...
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I was taught that one of the assumptions used in this strategy is that for the most part, the market has all ready priced the option correctly for the upcoming news so by allowing for some price movement within your strangle, this is more of a volatility play than a price play. Mark's re...
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- earnings
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The news was three-fold fold: (1) The Board of Directors has named Nikesh Arora as its new chief executive officer and chairman of the Board of Directors, effective June 6, 2018. He succeeds Mark McLaughlin, who is transitioning to the role of vice chairman of the Board for Palo Alto Networks....
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tastytrade tried to Put The Nail In The Coffin On Buying Premium Prior To Earnings. They did it several times, and we debunked their studies several times. Kirk Du Plessis from OptionAlpha conducted a comprehensive study backtesting different earnings strategies. This is the part that is relev...
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Trade Explanation: For the Volatility Advisory in NFLX, we are selling the Apr 427.5 puts and 520 calls and buy the Apr 425 puts and 522.5 calls for a net credit of $0.91 to open. Underlying Price: $474.22 Price Action: We are selling this $2.5-wide Iron Condor in the online...
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Introducing EarningsViz: Earnings Trades with an Edge
Jeff - EarningsViz posted a topic in General Board
I would like to introduce earningsviz.com, an options website focused on earnings trades. The thesis behind the website is simple: tail-end risk is mispriced around earnings events; by creating a simple and easy way to visualize this mispricing via analyzing option prices, it allows traders to pick... -
(My full options education article on why buy-writes have the exact same risk/reward as selling naked puts is at the end of this article.) The second reason I closed the position was there was a chance that SE would report earnings during the May expiration cycle. That would potentially bring a...
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Introduction The first question you need to answer is: will you hold your position through earnings, or will you close it before the announcement. In some of my previous articles, I described few ways to trade earnings if you don't want to hold the trade through the announcement. Ou...
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FB is one of the mostly watched stock in the US stock market. Many options traders try to play earnings using FB options. There are few alternatives. We will backtest them using CMLviz Trade Machine. 1. Buying Call Options This strategy involved buying call options on the day o...
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Are You Ready For the Drawdowns? When thinking about big winners in the stock market, adversity and large drawdowns probably aren’t the first words that come to mind. We tend to put the final outcome (big long-term gains) on a pedestal and ignore the grit and moxie required to achieve th...
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I began my career on the floor of the Chicago Board of Options Exchange in 1999 straight out of college. For a year, I stood next to two options trading legends, soaking up all of their wisdom as their clerk. That year, the market ripped higher as virtually every dot-com stock exploded higher day af...
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TSLA, LNKD, NFLX, GOOG: Thank You, See You Next Cycle
Kim posted a article in SteadyOptions Trading Blog
However, not all stocks are suitable for that strategy. Some stocks experience consistent pattern of losses when buying premium before earnings. For those stocks we are using some alternative strategies like calendars. In one of my previous articles I described a study done by tastytrade... -
First of all, as a general comment, there is no such thing as guaranteed returns in the stock market. If there was, everyone who is trading the stock market would be a millionaire. The proposed trade is called a long straddle option. A long straddle option strategy is vega p...
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Can We Profit From Volatility Expansion Into Earnings?
Kim posted a article in SteadyOptions Trading Blog
The study was done today - here is the link. The parameters of the study: Use AAPL and GMCR as underlying. Buy a ATM straddle option 20 days before earnings. Sell it just before the announcement. The results of the study, based on 48 cycles (2009-2014) AAPL P/L: -$2... -
Given the power of stock options to leverage your investment dollars, you might be tempted to bet on the AAPL earnings report coming out today by buying Apple calls (if you think the stock is going up) or Apple puts (if you want to bet that it will go down). That bet paid off handsomely...
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If the stock moves before earnings, the position can be sold for a profit or rolled to new strikes. You can read more about this strategy in my post How we trade straddles and strangles. Last week we entered a straddle on QIHU. Here is a screenshot from the trade alert posted in real tim...
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For Option Traders, The Real Opportunity in Tesla Inc is After Earnings Date Published: 2017-05-03 Written by Ophir Gottlieb LEDE Tesla Inc, with all of its stock volatility and uncertainty, follows a beautiful pattern after earnings are released and it makes for an opportunity w...
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@Yowster or others, I'm hoping to get some advice. I occasionally trade unofficial hold through earnings (HTE) calendars and have run into a recurring issue. After earnings, sometimes the price jump in the stock results in my calendar becoming deep in the money. When I try to close out the deep...
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What is the best way to receive an alert to find out when a company has just announced its earnings date? Is there a tool in IB or TOS that can do this or perhaps another way? Have been manually visiting Yahoo but it's quite time consuming to check symbol by symbol each day. Thanks
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