goog option plays for earnings week

anyone have comments on straddle/strangle swaps on
goog [or for that matter any stock] going into earnings and expiry week.....thanks!!

 

GOOG October straddle (2-3 strikes OTM) on the 18th, close on the 19th.

 

OTM? No such animal as an otm straddle. Long, short? Strike?

 

i would be looking for time decay and to close before earnings. 670c/580p (oct) 690c/560p (nov)

 

true..technically not a straddle, but with the strikes i'm considering are best described perhaps as a dd.

 

I get straddle/strangle mixed up if I don't have the definition in front of me. I was thinking of buying an October Strangle 2-3 strikes OTM based on GOOG's price as of October 18. Then close on the 19th, hold for just one day.

 

I quoted forex^2 in my reply. He mentioned an otm straddle, whatever that is. I wouldn't be long vega and short gamma here, especially with risk to your wing strikes. It's possible that GOOG will move 40+ on the report, but it's a certainty that Nov vols will open <27%. Oct vols won't matter if it opens outside your Oct strikes.

There is 600bp in upside skew at 15D. I would consider selling the 700C and getting neutral with spot. The overwrite earns up to 700 on shares.

 

the key for me is to close b4 earnings.

 

That's news. There is no upside to your DD if closed prior to earnings. Oct vols will see zero decay as Oct vols will rise at least 12 handles into the report. Oct will stay bid and Nov may drop a bit.

 

thanks for your input atticus.