so I took a look at PVH and you are right it was pricing in a ~6.5% move which would have made it a sell. (Sell the june 155 straddle for 9.80). I am not to sure why you bot the calls, can you elaborate further?
For PVH, I used the chart along with the earning reports trend. Ex. PVH has been reporting strong earnings while other retailers are struggling. This, along with the chart analysis suggested that PVH should bounce off its 50-day ma and breakout above $163.
Yes, these are definitely different strategies. I'm setting up for directional moves that could take more than one day to follow through, where I see you're looking at locking in IV crush by selling straddles. It will be interesting to see how both plays out and make profit over time.
I used to know someone who would use that strategy too, and the issue occurred when the stock moved beyond the short straddle. He would tell me that the trade would result in -100% losses of initial risk at times. That's why I mentioned that you might not want to blanket the system to all earning reports.
But there are patterns in trading earning reports. Ex. I traded INTU on a pattern where my initial risk on INTU Jun 195 calls was about -$1000, with a net profit of +$975 3 days later. I did without really looking at INTU's fundamental, just pure pattern recognition using optionslam.com too. That site used to have a history of 12 reports for free, but they've since charged you for that.
Comments on Profile Post by optionsinvestor