01-23-2021, 09:03 PM
(01-23-2021, 08:16 PM)vbin Wrote: Has anyone played earnings buying both weekly calls and puts? If the stock moves big the gains could be multi fold. If stay flat, the position can be closed.
I bought weekly calls on both intc and ibm to.play the earnings thinking 1 should do well but both went down 10%. I actually had bought a put on ibm too but I closed it before earning thinking it should be fine but the old machime went down. Thats when it occurred that if I would have kept the put as well. I would have made 5 times my investment, lol.
Thoughts?
If it moves big enough to overcome your purchase price and the vol crush, you can make money. Otherwise you are toast.
That is the volatility crush and is what is usually the play for earnings.
Because IBM dropped, the volatility stayed up or increased, that is why you would have made money along with being directionally correct.
It is tough be long options for an earnings play. If you buy some with longer duration, you have a better shot to get out with some $$. The weeklies go POOF.