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Old Apr 22nd, 2012, 08:48 PM   #7
Riffraffpatrol
 
 
Join Date: Feb 2011
Posts: 236
Quote:
Quote from J-Law:

EarningS they reported strong on 4/19. 35% increase in EPS.
Yes, vol. But wondering how. Vol crush on the calls. But not action in the puts?
Vol crush hits both sides. Premiums were massively overinflated pre earnings. Even if u r right on direction u need an extreme multiple std deviation move to compensate. Pretty simple stuff here.
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Old Apr 23rd, 2012, 01:39 PM   #8
J-Law
 
 
Join Date: Jun 2002
Location: NYC
Posts: 353
Yes, Riff thought about it for a bit. Thanks. Then, it hit me.
Thanks for posting guys.
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Old Apr 24th, 2012, 05:57 AM   #9
FrankSlaughtery
 
 
Join Date: Aug 2010
Posts: 849
related funny but absolutely true story re to selling options ahead of earnings...i worked at a retail brokerage once and took a call from a client who had sold enough naked puts to choke an elephant on a highflier momentum stock. anyways in his infinite wisdom he did this less than a week before earnings and never flattened or hedged before then calls up after the stock drops 30% b/c of earnings and lost more money than my salary. here's the best part - he had no idea why the stock dropped! i had to bite my tongue so i didn't laugh and/or say "well a fool and his money..."

happy trading - and check when earnings come out...
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