There are a lot of complex moving parts. All that you can do is buy or sell the thing. Modeling is complex. I arrive at a risk-reversal skew figure/ATM vol. An integer figure which I rank against prior Q-earnings releases. SN-vol generally has a put skew. Know where you are in the news cycle, etc. See how sector indices/ETF are performing. Perhaps do portfolio-wide hedging in index options. If your goal is to keep the shares and reduce tax-sales... then stay out of near-term CC. If you want to keep it as simple as possible: write OTM 2024 calls and revisit in 2024.
No, but the vol-figure @ delta will drop. Say that the ATM strike (50D) is trading 30-vol. Post report the ATM strike for the same term will be trading 28-vol. If you want to sell vol then you need to add duration. If you want to bet on price and distribution, short near-term. If you're bullish then wait for the rally and sell longer dated vol. Trading Feb is not a vol-trade. I would start reading.
I had looked at TDA's earnings tab for a vol-figure and it's nonsense. Anyway, XOM vol term structure is essentially flat at 27% from April out to Jan 2024. You're risking 100-150bps on vol post earnings (25.5 to 26 vol). The only risk to waiting is a drop in the shares post earnings. If I was forced to trade it... I'd wait until after the report, but it's a close call.
I will continue to read. I wasn't planning on getting into as complex trades as you were suggesting. Thank you for your advice. I would be snow plowing down a black diamond.
The April 105C at 2.25 extrinsic doesn't look like a bad short. It will be 1.5 max after earnings with shares above 116. I'd short the 105s tomorrow and cover post report.
When you say short you mean sell calls at 105 strike price April 21? When you say cover what do you mean? April 105 are bid 12.95
Sell 105C tomorrow and cover post report as in "buy to close" because the vol will drop, thus the premium will drop? And I will buy back the contract and make money.
You're very likely to get assigned at 105. Is it worth it to you to receive $118 net for your shares no later than April 15? It's not going to make sense to cover if trading an ITM strike as a CC.