I came across a post hours ago about options straddle, where you buy a put and call +-XX amount netting a profit if the value of the underlying goes beyond the +-XX.
My question is with the same principles wouldn’t it be high win situation with less risk for this option trading strategy to be used on earning reports?
The substantial +- that occurs from quarterly reports deviates from a range of +-5-30%, let’s take $AMZN $AFRM $LULU $TIGR, from the quarterly report the company faced massive change in share value, some going crazy up and crazy down.
Would you net profit when straddling on such events? The risk reward ratio seems fairly low considering the insane volume that occurs before an ER.
What are your thoughts on straddling on ERs? Say a mega cap stock is trading at $100 and I get 10x 98$ puts and 10x 102$ calls with IV of say 30-50%? Potentially get these calls/puts a month out in case the stock reverses back in the coming weeks?
Submitted September 11, 2021 at 02:44PM by ZiRoRi https://ift.tt/3z3cYSb
