100% cereal. Scared money trades a strat with too much size and covers too quickly. I know a trader from Germany that started with $5K positions in exotics and that eventually led to $5MM positions and a >$100MM bankroll.
Well I am looking at calendars but they should fit your sell the straddle strat...especially DDS... ATM straddle maybe $9.00 at that vol and look at stock price movement... 4 days until earnings so nice theta plsu vol crush to 57-61% range maybe...
Yes, there is an edge - if you get it right. Here is one example: How We Made 62% On CF Industries In 2 Days (this one we played with calendar, betting on IV of the front leg going down). But we also got burned couple times where we bet on earnings date with straddle based on previous history of few years. We did it couple times with ORCL betting on the company reporting on the third week of the month like it did for years. Made 15-20% couple times, but in June 2017 they pushed earnings one week later, IV collapsed and we lost 33%. I would say it's a pretty high risk bet because most of the time, the options market gets it right and has a pretty accurate estimate of the earnings date.
The secret to buying pre earnings straddles? -Don't buy them!!!! There, the secret is out. If I can get creamed by buying pre-earnings straddles in NFLX, NFLX!!!, a stock that moves typically -+10% after earnings, so can you. NOT worth it.