I am in a small options trading group that follows the TW
methodology. Many of the trades are selling Strangles and
Iron Condors the day before Earnings to benefit from the volatility
crush. Truth be told this has been the worst Earnings Season in
memory, with many stocks moving well over 2x their expected
earnings move causing traders to be deep in the money with short
options. Case in point, DOCU, down over 35%. If you sold a
Dec 3 190 put yesterday to pick up .65 credit, you would now be
dealing with that same put which is worth 45.65. That's a $4k loss
overnight. Fortunately, I sat that one out. Sometimes the best
trade is the one you don't do. ;-)
I am in a small
Not that I do a lot with options but sell ...
Posted by craigm on 3rd of Dec 2021 at 09:48 am
I am in a small options trading group that follows the TW methodology. Many of the trades are selling Strangles and Iron Condors the day before Earnings to benefit from the volatility crush. Truth be told this has been the worst Earnings Season in memory, with many stocks moving well over 2x their expected earnings move causing traders to be deep in the money with short options. Case in point, DOCU, down over 35%. If you sold a Dec 3 190 put yesterday to pick up .65 credit, you would now be dealing with that same put which is worth 45.65. That's a $4k loss overnight. Fortunately, I sat that one out. Sometimes the best trade is the one you don't do. ;-)
Thanks for the info.....and reality
Posted by Ray on 3rd of Dec 2021 at 10:00 am
Thanks for the info.....and reality check!