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Episode 159 (Yiddish): Should I Buy Options for Earnings?
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In this week’s lecture, I talk about whether it’s a smart idea to buy options before a company reports earnings. I explain the risks, the potential rewards, and how implied volatility (IV) affects option prices during earnings season. If you’ve ever thought about trading options around earnings, this lecture will help you understand what you need to look out for first.
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Lectures
detailed.
Quick question.
Earnings.
was expired in take not the company's
earning dates. Okay. Okay.
earnings dates
in and got a call.
And the idea is as I
closer to earnings and
is
earnings.
This is basically the
question
in the subject.
So the company is listed of the US stock
market
earnings. Okay.
numbers report numbers. But basically
what is as the
the
English is the quarter
expectations
earnings reports but their earnings
reports get read the
company listed of the US stock market
releasing the earnings announcing the
earnings report
earnings call investors kind of
questions
earnings reports
the moves in their
expected.
expected
as the next
was the market expected as they
forecast
impacted the price in the stocks.
This is earnings. The next
commitments from the option.
The stock
of dollar
option.
This is a call option. The next is
volatility. IV mind implied volatility.
In the next
free webinar
standard deviation
impacted by volatility
free webinar
Delta
webinars.com
the event the volatility mind the shock
the expectation the expectation was
doing in the market the guy was on a
gross
volatility
and then the implied volatility is
expect
this is the implied volatility. Yes.
As the implied volatility is expected
implied volatility
do expect
the company and
and and
unknown one's
The market anticipate
volatility
surprises.
Okay.
got increase in implied volatility
implied volatility off
the price and the options off. So
earnings call option
volatility
as it gets closer to earnings
is the shall the
them. Number one,
Fore
dollar
call is Billy When the stock is when the
stock is ended
optioned when the stock is
optioned
I don't know
whatever so the point is
The solution
problem
detail.
determination
earnings
negative. So they do
question implied volatility
potentially
potentially the fact
the the solution
The solution is basically
a strangle
mind
expiration
strike price.
The call cost $1, the put cost $10
options contracted.
So
over the back end value
risk.
ctional risk.
Number one, the implied volatility
of
earnings
over the options premium.
cost.
So
is under strike prices.
Out of the money says
the call
95.
So this is a strangle out of the money
call and out of the money put. Now
implied volatility
implied
from volatility
strategy.
earnings
announcement
and most most of the time. Okay.
Number one
research in the past Same stock
earnings
back
in
today's specific stock in history
increased increased implied volatility
negative factors.
So
advance
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