9 matching records.
Yes, it is a valid choice. However, traders should reassess their assumptions after a big move. The speaker suggests that trading post-earnings can be more advantageous as it reduces directional risk.
The speaker believes that trading earnings is most effective when volatility is high, as this provides the best opportunities. They also emphasize the importance of avoiding buying premium and staying outside the expected move, preferring small wins over large risks.
The speaker does not trade earnings, but they have done trades related to specific companies like McDonald's and Intel.
The speaker suggests that going wider on the trade into earnings is not necessarily better, as the trade is essentially a bet on whether the underlying will move outside the expected move or stay within it. The speaker notes that there is no edge either way, and the trade is priced to perfection.
The speaker discussed placing trades on Meta and Microsoft ahead of their earnings. For Microsoft, a broken wing butterfly was used to capitalize on volatility, while for Meta, a naked strangle was sold to profit from expected volatility normalization post-earnings.
The speaker advises that if you would not open the position today with the current information, you should adjust or cover it. If you would open it, you should hold it but re-center the strikes around the expected move. The key is to adjust the position to be outside or at the expected move to increase the statistical chance of success.
The speaker suggests selling naked puts as a favorite strategy for earnings, especially in low volatility environments. They also mention using ratio spreads and strangles depending on volatility levels and market conditions.
The speaker suggests that traders should be cautious about earnings due to the potential for low volatility. They recommend short-term trading (1-3 days) when volatility is high and avoiding longer-term positions when volatility is low. They also suggest going out a little longer than usual if the expected move is significant.
The speaker is considering trading Apple's earnings but is not certain. They mention leaning towards selling puts but are cautious due to the high VIX and the need to avoid market shocks.