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Here it is -- a portfolio of FAANG stocks using pre-earnings trading. A 3:30 video that is staggering and includes some robustness testing. Reminder that you can sign up for Trade Machine as a Steady Options member here: https://cmlviz.com/register/cml-trademachine-49-mo-promotion-so/

This video describes a trade on NFLX before earnings. The rationale was to take advantage of the increased volatility in our option by initiating this earnings play. We will show you in this video why this trade had a bad risk/reward despite inflated IV. Download video: How NOT to Trade $NFLX Earnings.wmv

By this time last cycle, we'd already exited our consistently profitable NFLX calendar (a 4 wk version in this instance). Official entry point for the double calendar was ~1.3% of the stock price (or, $8.40 / ~$650). The official exit was for a gain of >20% at 1.55% of the stock price. The DC spread climbed to over 2% leading up to earnings, and many of us booked exceptional profits. So, I'm looking at spreads for the current cycle in this post-split NFLX (as an aside, it took a lot of explaining to my wife why I was in such a bad mood for an entire day upon hearing the news that NFLX would be splitting). It would be a 5 week setup this time (long Nov, short Oct, ER confirmed for Oct 14th). The DCs are around $3.90, or 3.8% of the stock price! If there hadn't been a split, that % would equate to a DC price of $27.30! A few observations (note: all IVs referenced are for the $105 strike, stock is @ $103): IV is much higher for the 1st post-earnings expiry, the Oct monthlies, at 72%, compared to 45%–50% last cycle The IV drop for the Nov monthlies is much less than typically seen, as IV is still at 60% for that expiry date Maybe most perplexing, even the the options expiring before earnings have an astronomical IV, which, at 52% for the Oct wk 2 options, is higher than post earnings options last cycle ​Unfortunately, these observations lead me not to robotic execution of an assuredly profitable trade, but rather to merely a bunch of head scratching and brow furrowing. So, I thought I'd start a topic for an idea kick-around. My initial instinct is to open a 1 wk calendar that straddles earnings due to the high IV of the Oct wk 2 options, which have traded as low as $2.65 today for the $105 call calendars.

NFLX announced earnings today after the close. Couple hours before the market close, I got a following trade alert from one of options sites I follow: Trade: SELL -1 IRON CONDOR NFLX 100 APR 15 520/522.5/427.5/425 CALL/PUT @.91 LMT [TO OPEN/TO OPEN/TO OPEN/TO OPEN] 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 Click here to view the article