I won't hold a position into earnings nor will I trade pre-market or after-hours during the earnings announcements. So if you're asking me if I practice what I preach, the answer is yes. The answer was not always yes, but it is today.
...and that's just me personally... Everybody is different. If you have a consistent trading approach for earnings versus just getting long or short before the announcement (based on a hunch or TA or tea leaves or whatever), then more power to you. You could post bids/offers at the lower/upper ranges of the projected earnings move and grind it out through the announcement. You could have a plan going in, but you're still relying too much on hope IMO. I feel like it's a gamble. I don't know how one would take a systematic approach towards trading into an earnings announcement. I'm sure the mathematics science PhD might have some valid ideas, but I'm not that guy...
Trading earnings is fundamental speculation. You either need to have inside info or be able to analyze options volume to see what the people with insider information are doing.
not necessarily. one popular way to trade the earnings is to buy and later sell the options,betting that volatility will arise,when stock is moving closer to earnings. i'm wrong? the other would be directional trading. specially,if you spend time,studying price gaps,that occur after earnings. list can be pretty long, just use your imagination
I like the IV strategy but I would think that THETA would cause any potential profit to decay... Depending on how far out you make your purchase (and the direction of the move since you buy your call/puts), you may just break even... if the trade goes in your direction... You can get very creative in trading - but achieving consistent profit is another story. If you can trade earnings in a boring mundane structural fashion (i.e.: NOT gambling), then I tip my hat to you sir.
---If you can trade earnings in a boring mundane structural fashion-- i spend 10-12 years daytrading(not earnings),using my own soft,system,stats etc. yes. it's very boring,slow grind each and every day. same as any other 8-5 job,except for much longer hours. more like 8 to 10 pm
If that's true (and I have no reason to believe that it's not, aside from my skeptical nature) than I wish you were my mentor...
nah..you don't want me..and i'm not trading right now.the stuff that i use to trade doesn't work anymore. i know why,i know when and from where it was coming,but there is nothing i can do. that's ok, it was expected.