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johnshepherd59
 

Registered: May 2012
Posts: 77

 

07-26-12 01:12 PM

I own a FB straddle. Bought it two days ago. My plan was to sell it pre-earnings. Really did not anticipate Znga making such an impact. In any event, I still expect the straddle to trade higher. I gained some $$$ yesterday, but I don't know what impact Znga will have on volatility. My opinion is it makes things even more uncertain.

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trader198
 

Registered: Mar 2010
Posts: 1217

 

07-26-12 01:23 PM

it amused me.
the word " was not priced in"
"was unexpected"

the IV really means something, it means nothing!

if people can price in, I think no one should do trading, since there is no business.

I hold 100lot put ZNGA at 0.13. just wondering and worrying how my QQQ 62 call at 0.8 work out, think about GDP release, the funny things
this morning is going up becuase of some comments from Euro FED.

if I try to price in, expect, just does not work. that is why JPM lost billions in derivate trading, those guys are pricng in and pricing in, small guys like me, just laugh to bank, oh ya, I did not expect, ...I did not price in




Quote from cdcaveman:

It will still imply a 3 dollar 11 percent move tomorrow.. the jump down was unexpected.. it wasn't priced in

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cdcaveman
 

Registered: Aug 2011
Posts: 3518

 

07-26-12 01:35 PM

Strong form efficient market theory... its stupid.... but I was justsaying the znga thing wasn't why the options were priced that way and they will be priced that way today

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cdcaveman
 

Registered: Aug 2011
Posts: 3518

 

07-26-12 01:56 PM


Quote from johnshepherd59:

I own a FB straddle. Bought it two days ago. My plan was to sell it pre-earnings. Really did not anticipate Znga making such an impact. In any event, I still expect the straddle to trade higher. I gained some $$$ yesterday, but I don't know what impact Znga will have on volatility. My opinion is it makes things even more uncertain.



have you simulated what happens to your straddle if it just gots back up to thirty after earnings ? are you not completely toast if that happens?

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johnshepherd59
 

Registered: May 2012
Posts: 77

 

07-26-12 02:24 PM


Quote from cdcaveman:

have you simulated what happens to your straddle if it just gots back up to thirty after earnings ? are you not completely toast if that happens?



My plan is to sell the straddle before earnings announcement. The announcement is after hours. I am trying to take advantage of increase in volatility before the event. I expect speculators to drive up the price of the options.

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cdcaveman
 

Registered: Aug 2011
Posts: 3518

 

07-26-12 02:26 PM


Quote from johnshepherd59:

My plan is to sell the straddle before earnings announcement. The announcement is after hours. I am trying to take advantage of increase in volatility before the event. I expect speculators to drive up the price of the options.



i swear that is the best way to play earnings.. theres nothing more predictable then the inflation and implosion of vol before and after.. i've bought options for bidu a week before earnings and did very well.. I planned on taking it off the table but didn't and the vol collapse put me right back where i started..

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