GOOG Earning plays : 3 Profit out of 4
Published on February 1, 2007
GOOG Earning plays : 3 Profit out of 4
Here are the results of the 4 trades I placed to benefit from the google earning event:
- Here is the first trade that I opened on Jan 29th with a Bull Put credit spread strategy. I sold for $4.05 and bot it back for $3.40, before market close. This resulted in 10% profit.
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2nd trade was based on what OP reader Avi had suggested here. My credit was $3.24 and I bought it back for nearly $0. So I am able to keep all the credit received. The returns on margin are 6%.
Here is the 3rd trade. Just before the market close the volatility was very high. I thought to take advantage of high IV and open an Iron Condor for which shorts were more then 10% beyond the closing price. I sold $570/580/440/430 Iron Condor for $1.40. I bought it back for $0.20. The returns are $1.20 on $8.80 margin i.e. 13.6%.
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4th trade i.e.backspread is currently losing money. Google is continuing to go down, currently it is $14 down. If it goes down by further $10 by Feb 16th, I will be making money on this trade as well.
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Please note, all the above trades I experimented via paper-trade so as to learn and craft my strategies for furture events like this (Not necessarily only Google).
Profitable trading, OptionPundit
OP,
Good sharing. Profitable trade for both directional and non directional
play.
Waiting for more strategy sharing from you.
[…] Here is a quick update on my Google earning play. Overall I played 4 trades for google and three were winner that I called out here. The only trade that was in loss zone was this one. Last night when google fell, $14, it also became profitable. If google stays where it is or fall further below by Feb 15th, I will keep all the credit received i.e. $855 over $3145 margin required and that’s cool 27%. Here is how the current chart looks like […]
How about a play taking advantage of the volatility crush the day
after earning announcement. For example, on the morning after the
announcement both calls and puts decrease in price. Put options cost
less than $1. As the morning progressed, volatility came back and
the stock traded lower. Those put options increased more than 400%.
Happened again today with MA earning announcement. Also happened
after AAPL earnings announcement. I like these kind of plays. It takes
the complication out of guessing before earnings what will happen.
Take advantage of the volatility crush AFTER earnings.
[…] started with fundamental analysis and later I talked about 4 different type strategies. It may not suit to your “speculation style”. This is surely not an […]