Well, I have covered how to play earnings extensively. This time, I want to experiment in a different way. This experiment is a combination of IV increase + Greed prior to the market close before earning announcement.
Say it another way, I shall be buying intra day strangles at different strikes, I shall keep it today but close it before the earning announcement or as soon as it hits 25% targets (pretty cool for Intra day without taking too much of risk). One can argue that theta and delta may pose a lot of risk, so the answer is only “practical experience”. I have seen time and time again that greeks normally don’t work before the earning announcement. It’s the “greed” and “fear” that encapsulates the pricing not the pricing models.
So here goes the experiment, for GOOG, SLB and hopefully CAT,
Profitable experimenting, OP
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Hi OP,
Can you share at what strike prices did you enter the trades?
david tan