This will be another options trading thread, will cover earnings trades that I do regularly. Most any options trader knows what this means, but I'll offer the following in explanation.
All publicly traded companies are required to issue earnings reports quarterly. These earnings releases (ER) are scheduled events, with the date/approx time for each ER known weeks/months in advance. For instance, AAPL will have an ER on Feb01, after regular trading hours.
For options traders, these scheduled ERs are special, recurring opportunities. Because options implied volatilities predictably rise into the ER dates, and then predictably crash thereafter. In trading, Predictability = $$$.
Trading ERs with options is very popular and there alot of different strategies that traders use to capitalize on the iv rush, the iv crush, and also the potential large moves in the stock price that may occur after the ER.
All publicly traded companies are required to issue earnings reports quarterly. These earnings releases (ER) are scheduled events, with the date/approx time for each ER known weeks/months in advance. For instance, AAPL will have an ER on Feb01, after regular trading hours.
For options traders, these scheduled ERs are special, recurring opportunities. Because options implied volatilities predictably rise into the ER dates, and then predictably crash thereafter. In trading, Predictability = $$$.
Trading ERs with options is very popular and there alot of different strategies that traders use to capitalize on the iv rush, the iv crush, and also the potential large moves in the stock price that may occur after the ER.
"If The Fool persists in his Folly he will become wise." - William Blake