Good new, bad news or no news will be ok. But IMO there is a lot of "pressure" in GOOG and on Friday it's going to blow either up or down, $500- or $700+, regardless of any news this week. I am looking through the paper now for a new SUV maybe a Dodge Nitro or even a H2, hope to pick it up on Saturday.
Not sell the position, just do not rush to buy inflated vols. There is a difference between being long or short deltas and being long or sort vegas or vols. Long straddle is delta neutral and vega positive. So you need a big move to overcome the inevitable vol crush. You can bias the straddle by moving the strikes higher or lower from the ATM strike but then you also need to be right on your directional bias. I myself am playing the IV to keep fattening up until end of Thursday and getting theta with double calendars. To avoid the vol crush since I am heavily long vegas I will most likely bail Thursday before the close. Overall the position is delta neutral and simply a play on vols and time decay.
this was a great trade for RIMM (thanks cashmoney69 for the idea). The key was to wait for the frenzy to build in the last half hr. sold (1) straddle when stock was at 100 then (1) at 105 just prior to close. Second key was to take profits at market open within the first 10 min of trading not letting delta run away. having said that this isn't the best play for GOOG simply because there isn't enough time value left in october...and too much time for Nov..so the delta move could definitely outweigh the vol crush. forex-forex go back and read Riskarbs combo to conversion thread to get a feel for this type of trading. as optioncoach mentioned a better way to play was/is calendar or perhaps even diagonals.
I wouldn't say that I'm neutral...I would sell you that strangle and just hedge with an out-month. I just think that if you are set on going long a strangle, it's probably easier to play it on volatility than on direction, in which case you'd get out before earnings.
Here's another take on the GOOG earnings f-f http://adamsoptions.blogspot.com/2007/10/earnings-in-american-bidu.html
Decided to open the position today since it's a slow day for GOOG. GOOG at $620.00. 1 contract 650 Oct call @ $6.90. 1 contract 600 Oct put @ $9.10. Commission $70.00. Total $1670.00. GOOG price target for Friday >$682 or <$568. I would like a 2x return for this sort of risk.