Trading options around earnings october
Market Close 28th November:. How to Adjust a Losing Iron Condor? To put this in context, the strike is currently 10 points higher than the current market price of Boeing. A special class of these algorithms attempts to detect algorithmic or iceberg orders on the other side i. This type of trading is what is driving the new demand for low latency proximity hosting and global exchange connectivity.
Looks like my pre-earnings Iron Condor strategy was indeed a bad idea. GLW released their earnings before the market opened Tuesday 24th January to the surprise of analysts. The stock opened strong and rallied higher throughout the day to close the session up 5. Since the pop in stock price due to earnings, the uncertainty has since been remove and can be seen in much lower option prices. Plus, putting on another Iron Condor in March would mean having to put it with narrow strikes in order to make it worthwhile but also means a lower chance of the stock staying between the bands.
Also to consider is trading options around earnings october sentiment since the report, which was very favourable for the future outlook of the stock. I would say that I am now bullish on the stock. It's not octoober a good idea to take on short volatility strategies pre-earnings, but take a look at this Iron Condor setup for GLW. The stock has earnings out January 24th and the options expire February 17th. At the current volatility level, there is a The trend is up, however, so this is going against the direction and looking for some pullback.
A high US dollar relative to China's Yuan makes it more difficult for US firms to export to China and conversely imports become a better alternative. Despite the stellar run of the Trding equity markets of late, Trump sees the continuing strength of the US dollar to be bad news for stocks. As a result, the pressure has edged stocks slightly lower. The other factor driving stocks lower was the US gov report on shale-oil production.
The drilling report points to higher output volumes for February for shale-oil producers in the US. This increase in supply will negatively affect the pact OPEC community has to cap their supply to As supplies are expected to rise, oil prices will drop. The drop in oil prices has been taken to be a negative for US equities. Analysts agound news outlets I've seen expect the averages to be up, apparently thanks to rising crude oil prices, which I always find confusing to read.
If oil prices rise, consumers have less money to spend on goods and services while also increasing the production and operating costs of many businesses. However, rising oil prices continue to be promoted as being the main calalyst for the rally in the equity market. Unable to use all the capital, Saudi Arabia sends the excess savings back into the global financial system.
Banks then use that capital to lend. Interest rates also fall as the financial markets are more liquid. The end result is trading options around earnings october interest rates, more financial liquidity, higher asset values and ultimately greater consumer confidence. In short, higher oil prices could boost economic growth. Only other contracts traded through the remainder of the option series. Earnings for WBMD also not until the 21st Feb, WBMD, however, fell short of the straddle expectations.
After a strong November where, despite concerns regarding the US election and equities making all time highs, the US stock market has pull back on its' most recent 4 day up steak post the Thanksgiving holiday. The options with all the volume are in-the-money so there seems significant interest in this stock at this point. Earnings aren't released until the 25th Advice forex trading without indicators, so might be worth keeping your eyes on this one.
Souce: Option Scanner Pro I didn't do much during November With 3 months to go the puts are only trading at lctober. I bought 5 at the offer at 0. Seems a long shot, I know, looking at the chart but there's plenty of time here and the company has earnings out on October 28th. I closed out 4 positions Friday as the October options expired. Well, I didn't really do anything; just let the positions I had expire. The only winner was the Iron Butterfly on BAC. I was pretty confident about that one; the range of the break evens was narrow and implied volatility was low.
They are the same thing I suppose Here is a chart of how that played out; You can find the charts of the other trades for October here. I eadnings out 5 positions just after market opened Friday as it was the September expiry. Of course, they don't all turn out like that but I was happy with that optinos. Eldorado Gold's call options optkons trading options around earnings october some huge interest from the market; there are 93k in open contracts across the October series vs 7.
The volume going through Tuesday's session was all call options - no puts traded at all. About 10k in open interest across the entire expiration, so this is a pretty large bet someone is trading options around earnings october. I bought 10 contracts at 0. Trading options around earnings october probably optlons have bought in lower if I'd paid attention to the pre-open The Delta of an option does more than approximate the price move compared to the underlying; it also describes your directional bias, serves as a proxy position for the underlying instrument and estimates the probability that the option will expire earmings.
Delta isn't static though; it changes constantly with other pricing factors and it's important to know what they are. However, I covered by VIAV assignment with some calls that made back the loss on the premium from the bought calls, so was happy with that result. What started out well for 2 out 4 of these trades ended up all being losers.
CYH almost tripled in value and ANF over trading options around earnings october the initial investment early on. My trade management and exit strategies definitely need some consideration. So far, I've simply been betting on a move and waiting until expiration. Some of these trades really start out well but I hang on too long and exit them at a loss. I took positions in 12 stocks for 14 trades in total, as I made two adjustment trades in MRO and ETE.
As options approach their expiration date, their value can erode quickly. Tading you're long out of the money options then this effect can be quite dramatic; you can lose money even when the market moves in the right direction. HRB Stock tanked on Wednesday the 27th after the company reported a disappointing tax frading. Outlook remains bleak for the stock and their next report is due out in June.
The next day, HRB drops Delta measures the theoretical change to the value of an option as the underlying changes. This means the option's value is tied to the underlying by the amount of "delta" the option theoretically has. Traders can then offset the risk of the opiton by trading an appropriate amount of shares in the underlying security Read more The Binomial Model is the model of choice for American styled options - that is, those options where you can exercise any time up until the expiration date.
There's lots of programs out there that will charge you a monthly fee for a calculator that prices up option contracts. I've put together a little something in Microsoft Excel that just does this, plus prices up all of the Option Traxing. Browse our comprehensive dictionary of option combination strategies. Learn how option combinations give you the ultimate flexibility with your investment decisions.
Scan thousands of stocks and ETFs for profitable option opportunities in minutes. Option Scanner Pro will tell you where the huge option volume action is taking place. How to Adjust a Losing Iron Condor? What Options do I have to Adjust? I have a few alternatives to consider as to how to manage this trade at this point:. Do nothing and hope that the market pulls back from now until traring.
Sell a higher strike put spread. Sell a higher strike put spread in the next expiration. Reverse the existing short call spread into a long call spread. Close the short call and leave the long call to run. Double down with another Iron Condor. In considering the above, I looked at the option prices at the close for the Feb 17th options:. VALE Buy ITM Puts 0. Volatility is relatively low. Stocks Down as Trump Stomps the Dollar.
US equities were down slightly in Tuesday's trade due mainly to two factors:. Comments by Donald Trump that a strong US Dollar is hurting the US economy, and. A drop in Oil Prices post domestic oil reoprt. Trump: US Dollar "too strong". Oil Report Casts Shadow Over OPEC Supply Pact. Q4 Earnings Boost This Week. Ezrnings financial markets closed to commemorate Martin Luther King Jr.
So there you go Important Releases this Week:. Change in Crude Oil Inventories. Philly Fed Manufacturing Activity Index. Initial Claims for Unemployment Insurance. Call Spreads and Straddle Opportunities. There are no up coming earnings for MT, not until February 21st, Market Close 28th November:. Option Market Price Volume Open Interest.
Souce: Option Scanner Pro. Update December 16th, Stocks End 4 Day Bull Run. QCOM Call Option Alert. Market Close 25th November:. Zero Wins and Three Losses for November. I didn't do much during November DDD Long Put Sep Oct 37 JCP Long Call Spread Sep Oct 34 CNP Long Call Sep Oct 31 A Long Shot with BLMN Puts. A Rough Month for October. Here is a chart of how that played out.
You can find the charts of the other trades for October here. The Most Important Option Tradig. July 15th Trading Summary. June 17th Trading Summary. Make Time Decay work for you. HRB Move an Inside Job? However, it appears someone knew of the pending downward move in the stock. Using the Delta to Hedge Options. Traders can then offset the risk of the opiton by earings an appropriate amount of shares in the underlying security. Pricing Options with the Binomial Model.
3 Earnings Option Strategies
Find the latest business news on Wall Street, jobs and the economy, the housing market, personal finance and money investments and much more on ABC News. Iron condor trading is the best way to earn a consistent income in the options market without needing to pick stocks or time the market. You're able to exploit an. Learn trading options from CBOE and OIC veteran Dan Passarelli. Become a market taker through our options education program. Get free options advice, information.