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Selling puts before earnings reddit Make your covered call real close to the actual price if your conviction is very low on the upside. The downside of the stock dropping over the month is no different than if you straight up bought shares, so if that's what you would do anyway, then selling ATM or slightly ITM puts is the way. Play if you like to gamble. Before you enter determine how much you are willing to lose. 1, resulting in an implied vol crush of 23%. this is called hedging. So with earnings coming on Feb 8, when’s the perfect time to buy PUTS on PTON? Looking for 5 contracts 15 strike for feb 11 IC/strangles are literally the best position to put on before earnings, all else equal. I’m serious. 46. post-earnings: sell neutral positioned iron condors or buy double calendars the day before earnings and close the day after or let expire If implied volatility decreases (based on net selling of calls and puts) the expected move decreases. e. From my point of view, it makes sense to sell to close the call option a day or two before earnings to capitalize on increased IV. Selling premium before an earnings announcement is a good idea because IV inflates and you get more bang for the buck and post earnings, there's IV crush and that goes in your pocket. If you think the stock won’t go below, say, $600 this year, you can sell puts for December. If a stock is about to report earnings, or about to announce trial results of a new drug, there is increased uncertainty of how the stock will react. Hey folks, starting to paper trade and backtest out some double calendar spreads, selling the first monthly calls/puts after earnings and buying the monthlies(due to higher Open Interest/narrower B/A spread than weeklies) after that. So you may find it better to purchase a few weeks before earnings, but I am still not 100% sure that would really matter since earnings dates are known unless you somehow get lucky enough to buy an expiration before earnings is known and it happens to coincide with an earnings announcement that the market didn't know about. I did some put credit spreads on ZOOM before earnings and Zoom decided to fucking double the next day, my options were worth nothing and I made like 99% profit. Personally, I like to sell naked strangles way out of the money. For beginner advice, brokerage info, book recommendations, even advanced topics and more, please read our Wiki here. I did buy calls on PTON with money I made selling puts on them which was nice but I sold them the day before earnings :( Every week I sell one contract of really deep NDX/SPX OTM puts ( or put credit spread/ strangle) 16 weeks out. Has the equivalent delta to buying protective puts without the theta decay. Selling calls on the other hand is taking advantage of the IV uptick though personally I would be suicidal if we rip and I lose my shares over the pennies you can get selling calls, after how patient I've been, so I don't do it. As long as selling the underlying at the breakeven point is acceptable, then selling the call is acceptable. Concept is simple, they are a fraudulent company and any spikes are usually followed by big dips. My main strategies are Butterflies for pinning, selling Put/Call spreads to collect premium and buying Calls/Puts for directional momentum. I’m trying to understand that the math on this, not $5,000 at the roulette table. If it rips on earnings, sell puts. Earnings came out last night and NVDA is barely moving. Selling cash-backed puts is similar, it's cutting out most of the upside, retaining severe downside surprises, and for that it collects some income. For selling puts, you don’t need to I managed to close my options after a 9 minute wait for notification before I could then TRY to sell my shares to see how bad I messed up. Additionally, if a stock is trending downward longterm prior to earnings, and earnings are bad, it Having some trouble deciding what to do with earnings approaching. Fortunately for me, these are all low dollar mistakes. The back-of-the-napkin calculation is 85% of the ATM straddle. So if you are bullish on snap sell away. As an official Fidelity customer care channel, our community is the best way to get help on Reddit with your questions about investing with Fidelity If you bought out of the money calls or puts, I hope you understand there is a low probability you’ll be profitable. : Options bought at $1 (cost) before earnings or a few days before earnings. Easy set up for puts, right? Wrong. Ideas for regular income selling puts / playing the wheel . You always want to sell strikes that are outside of it. But I'm fairly new to options and am learning as I go. If you get assigned you the stock you want. In these cases I usually immediately sell a call at the same strike price, which puts more cash in my pocket. If it tanks after earnings, sell calls - though far out delta just in case since the market in general is still in an upwards trend right now. Also look into the fundamentals although I primarily do technical trading. this is an educated suggestion. It is uncertain what the course of the stock price will be after an earnings release, but it is certain that IV rises leading up to the earnings date. The other 25% of the time I get put the stock. best time to sell puts now @$4. Basically, you buy a straddle or a strangle a set number of days before ER, and then sell it the day before earnings. If AMD tanks, there is probably 50-100 points easily. You dont Yea before the market got choppy I had great success with selling naked puts on high IVR tickers with adequate options volume and price under 50$. Expand user menu Open 70k gain on nvda selling puts Gain Share Sort by 18 contracts could have wrecked you. If your objective is to acquire a stock at a specific lower price, then selling puts before an earnings announcement is a very good idea because option premium is highest then. 5 dollars off the current price - it is like a 15. 15 is that a reasonable? Open menu Open navigation Go to Reddit Home r/options A chip A close button I actually sell puts right before earnings (1-2 weeks) and close it before earnings once I gain enough theta/delta. r/options A chip A close button. Some do a collar. Selling naked put is restricted only to those who have a higher level of approval, which can be harder to obtain. Btw, this was before earnings. Open menu Open navigation Go to Reddit Home. Hedge with downside options. Expand user menu Open Does it seem weird to anyone that we just had a 6% sell off and the VIX is back Earnings are mostly a crap shoot. So I’ll use a specific example - not actually going to do this now so don’t need advice if it’s stupid, just using this to understand the concept for future reference. If you're just Would it make sense to buy a weekly contract for both calls and puts right before a company releases their earnings? Theoretically you can only lose 100% of the premium you paid for the So, how do you trade options after a company releases earnings? When a company announces their earnings report, investors gain insight into recent and future financial performance. This was going to be my suggestion. I personally (if I had your thesis) would then sell puts at a lower strike with a shorter duration. It's like a PMCC, but with puts. However, there is some uncertainty during that time as well. e. I made a killing selling puts before all the big name earnings the past two weeks. Welcome to r/stocks!. You'll likely notice the options after earnings are suddenly a lot more expensive. I usually make most of my moves during my morning coffee break. you will cut off your profit but you wont end broke, as you do now. I would not suggest anyone else do similar trades because the losses can be so large. Both puts and calls will be likely be down as there is little to drive the stock either way. If she knew how to make money she wouldn't be on Reddit. Hi sorry to trouble you. As time moves forward, the option expiring after earnings will start dropping off the “normal days” that are being priced into it, making the earnings days implied volatility less diluted by regular day to day volatility. There are more sophisticated ways to calculate it that you can look up. The expected move is direct, and actionable expression of uncertainty. Both for buying and selling options. Selling shares is what I tend to suggest for novices seeking downside protection. 4). I am entirely out of options right now, the set up is just not great. Eg: buy weekly calls when the stock dips, sell when it goes back up A riskier tactic is sell far out puts. Iv is high right before earnings. true The less safe but still reasonable way to get some options gains is to play the volatility, but that requires close observation. People often use something called the wheel strategy. 2). Welcome to MarketScreen – Navigating the Financial Markets Together! 📈 MarketScreen is your go-to I don't sell naked puts at market tops esp around earnings I feel that your trades violates this , and you are gambling. Generally there’s a good reason for high option pricing. Yes, and it worked awesome in 2020, but is very hot or miss since and is way way harder than it looks. What stocks have you had success with selling regular puts ? View community ranking In the Top 1% of largest communities on Reddit. 6% off sale. It could've gotten much lower. Remember, option prices determine IV. 20 delta, but around earning it adjust down to 0. Short a mnq before earnings. Yes never sell Boil puts above $5. Might be There are many pros and cons to consider before trading covered call options during earnings season. Close the position latest on the day before the earnings call. However, this is a very risky strategy since god know where earnings for any one company will go. But the stock was going crazy - 16. If it’s red, it’s red; if it’s green, it I've seen instances of people selling a few days before earnings/day before and still win even if the direction after earnings is against their guess/if they are neutral (like and Iron condor) because of the insane IV crush. Investors use the earnings release to indicate how the company will perf Below, we guide you through how the strategy works. I saw most people do not sell puts before an earnings release I assume because the stock could swing a large percentage but my question is wouldn't the increased volatility play in your favor and after earning when a IV crush happens your puts will be profitable even with a larger price change? Interest when selling cash puts Earning interest income when selling cash secured puts Does fidelity still pay interest on the “cash collateral” when you sell puts? like the money is still in the cash sweep money market and while a short out for example a 100p and the $10000 is “collateral” do you still earn money market interest or their daily cash sweep on that $10000 If you want to hold on to your short positions (i. you should have bought a put and a call before earnings. My rule of thumb is cut the delta by IV - 75. The last time BB released earnings, the implied volatility dropped to 80. On an individual level, a person would opt to sell cash secured, vs naked put, because the naked put increases one's risk. NDX Apr23 SP 8100 - credit received is around $4K. The lowest it went was 665, so (705-665)×18×100 = -72,000. Please point out the many mistakes of this strategy: buy both calls and puts on the same stock, same day, expiry in 2 days, an hour before earnings. Was glorious. Look up "calendar put debit spread" for examples. Could be a long term bag but Id sell 10 4 week calls for if ATM for 10 $ per share and either get 1000 for 135 or sell again 10 ATM puts (10 for 4 weeks). For your example, it depends on which puts you bought, how much it costs, and how much the stock drops. IV is high before earnings because option markets see a significant movement in the stock prices due to earnings. If you're wondering why a stock moved a certain way, check out Finviz which aggregates the most news for almost every stock, but also see Reuters, and even Yahoo Finance. 00 strike for june16, 2023. Then reinvest it in an ETF. before winter NG price goes up and again before summer (hot summer expected). I know I could lose out on IV crush since it'll drop by vega for every 1% drop in IV, what is the best way to go about this? I’m skeptical as well, but these puts expire before any earnings reports will be released so that’s kinda irrelevant to this play specifically - this is purely a short term volatility play. The IV will increase even if the implied move on earnings hasn’t. Would it be wise to sell the options the day before earnings and rebuy to capture these gains (I am still long) or If you’re going to do it I would recommend buying an option that expires one week or less after the ER and buying said option a week or two before the ER then selling it maybe a few days before the ER to let the volatility potentially increase the option price. If you go with an ETF like VOO that money you reinvest will still have some exposure to NVDA while being diversified. if Amazon tanks on earnings, sell calls. never buy the BOIL. That isn't a thetagang Expected move is the single most important metric when trading earnings. Take a look at options a few months out, the ones right before earnings & the ones right after earnings. 5. The way to benefit from IV crush is selling weekly options right before the earnings announcement, when the options market opens after earnings are announced they'll have lost most of their value (unless the underlying price moves post your strike, as others have said volatility = opportunity but also risk) Buying Puts/Calls before Earnings Suppose I believe a stock A is going to go down after earnings report and I want to bet puts on it. It can work, but the tricky part is that vol doesn't always peak the day before earnings, and the amount of time from low vols to high vols can vary quite largely between companies and even ER's of the same ticker. 3). Please direct all simple questions towards the stickied Selling puts feels like a tool to trading, it's easy to buy and hold but it's not ideal to just buy into any position when you can sell a CSP until getting assigned. Curious about others' experience. So there could be a big move against you. It's hard to beat simple. Eg. If the stock goes to 8 and you sell right away you lose money. All I've known is losses while learning and trialing, now selling puts it's been night and day. Buying OTM calls/puts before earnings. It's risk aversion which chimes with my soul. You could lose $10k on the calls, and your puts are worth $15k so you've got a $5k net loss. 00 strike price 14 votes, 19 comments. it prob has topped out and there is a risk it falls from here, and may drop underwater on your naked puts. If you want to have a long call position, either get in before IV inflates, 30 days before earnings, or wait until a few days after when IV has returned to average. 54 more than 4. g. for predictions. Put selling generates immediate income through premium collection, which the seller keeps if the stock stays above the strike price. By selling naked, you are increasing both your potential profit and your potential loss. So I would be buying puts that are slightly OTM (below current price) with expiries in March or April. If its flat, probably best to do nothing. If your call goes ITM at least you pocketed some upside on the stock and collected the margin. Wish I had bought calls on most of them. Which again could cause you to lose money. Long term though, yeah I don’t think I will be continually selling puts on Reddit once it’s a more defined quantity with lower IV’s. Some sell a call. I'm pretty new to put selling mostly doing the wheel. I have a call on Amazon expiring in a few weeks that has made me some money. So I’ll use the weekend to figure out what I want to play (like last week was CRSR heavy, but I don’t want to still be in for earnings volatility), then make trades based on that general plan in the morning. i always wanted to purchase pltr shares and is it ideal to do that before earnings since IV would be high >> Tesla’s next earnings report is slated for July 19th with an estimated 46% earnings increase If I am you in similar situation, I would sell "Covered Calls" for about $28 (or even lower for better premium) and use that premium to hedge by buying equal #puts for about $23 (same expiry though) so worst case, you exit @ $23 if the price crashes. So I bought Watt puts on Friday when they went up 90%. As soon as the earnings are announced and the stock move happens the next trading session, the option prices go down as the market does not see any risk of sudden price movement. 5 days after earnings, the 30 day IV was 64. Don't transact right before Earnings season when it's already a volatile stock. Bears couldn’t keep it below 155 either so it might end up back in the 160-170 range before earnings. Not even looking at the charts just selling around 16 delta, instantly taking profit at 50% which could happen quite fast and usually cutting losses at 100% sometimes 150% or 200%. Earnings spike IV, so best to get short vega, hence the IC. pre-earnings: buy ATM straddles or neutral positioned strangles 2-4 weeks before earnings with expiration just after earnings. As long as you are comfortable buying the underlying at the breakeven point, selling puts will be fine. , 3:50pm ET. So I came to the idea to therefor look to profit off the rise in IV, by buying a long straddle 3-5 days before earnings day and planning to sell that long straddle on the day before earnings. Which means you’ll pay a premium buying options before earnings. Trading earnings is its own game, just as much as picking out stocks - selling puts at its low and calls at its high. If you're looking for time decay, a typical rule of thumb is to place the strike about one standard deviation or more away from the present price, and sell an expiration around 60 to 30 days out. I sell puts 35 - 45 dte, on blue chips I usually sell puts around 0. Unless you're buying way OTM puts a 5% drop on earnings for most companies are still going to net you a profit. Am I thinking about this It's easy to understand buy a put, it goes up in value, sell it for a profit ( and if you don't sell it before expiration and it's OTM, it's worthless). After earnings the iv will collapse and that premium you paid will be gone. . Caps the upside, but is often theta neutral. Meh, I think the real play for NVDA earnings is to follow whatever it does. this stock had 4 reverse splits since 2015. If you are ITM, book some profits and roll to a higher strike. In many cases, the decision depends largely on the individual investor’s risk tolerance and long-term investment goals. you are still bearish), you could use earnings as an opportunity for extra income and sell OTM (or near-the-money, depending how strong your belief is it will tank on earnings) PUTs, again, depending on how large your position is (you need atleast 100 shares to sell 1 PUT to cover it incase it tanks below your strike). Make sure the check the stocks implied volatility history in the lead up into earnings What I need to figure out is, say out of 200 sold puts, across many different companies with specific attributes, are likely to drop 15-20% or more in stock price after earnings. I set a personal cap at $25 share price to sell a Put, and that saved my hide. Yet there are many other approaches. But every time I try to do covered puts or calls I don’t seem to be getting them right. That doesn’t mean it can’t happen, but buying options before earnings is literally like going to the casino and gambling, especially when they are this expensive. Usually, however, I think what happens is that a stock trends upwards in anticipation of earnings, then people immediately sell that spike when earnings happens and it drops. Pretty much this, with that many shares at that level of gain I would be taking around half my position and sell before earnings. I've often sold weekly puts. If it rips after earnings, sell puts. Stop taking one bad flip of a 70% / 30% coin and saying that math works against you. OTHER OPTIONS buying shares and selling bull put spreads, for example sell a put at 45 and buy a put at 40. If you sell a contract worth $1000 and it decreases in value to $500 you can do 2 things: In all scenarios above, you're coming out -5% to -50% post-earnings and theta will continue to sodomize. 0. E. Win percentage is high but the few losers can be ridiculously large. Don't be greedy. Low volume Options are harder to roll your way out of. Last Q, call buyers made a killing after earnings, and I was SO tempted to jump in this time, with NVDA and AI all the rage, but thankfully the wrinkled side of my brain prevailed. What I do when I actually want to make money: I play into earnings on that first example, 3-6mo out, expensive ATM calls (or puts) and sell 6-24hrs before earnings to take advantage of pre-earnings IV. Same with selling calls before earnings. Book SOME profits, leave a runner. However, if I expect the stock price to go up significantly from earnings, it could make sense to hold through earnings as the increase in the stock price will outweigh the drop in IV. Natural gas futures prices. I usually sell naked puts right before the market close and the company reports, i. I been reading ur comments on the options chat and would really appreciate some guidance or pointing me for basics on buying options (calls and puts). Made the mistake of selling a put before earnings before. Cost increased due to IV from the uncertainty of earnings, thereby can sell for profit. I'd say about 75% of the puts I sell expire worthless, allowing me to pocket the entire premium. 495 subscribers in the marketscreen community. I been trading aggressively for a year w bear and bull puts and calls and naked too. You get assigned you sell call options. You can also short puts on a bad earnings if the drop feels overblown, like Netflix’s recent ER report, where truthfully the numbers weren’t even that bad and nothing was catastrophically bad. Depends, I bought $150 calls for aug 2, IV was much lower than anything expiring earlier and not that much extra premium paid. Been able to do this for the past 4 weeks - sometimes naked puts get replaced with spreads or strangles but the premium is around the same. If i can take profits I will sell before earnings, if not then i am holding till after earnings and maybe end of the week, depends on how it moves. You need a plan for that outcome regardless of how much is With Slack reporting earnings on 9/8, one can take advantage of the higher implied volatility from earnings (and the recent market decline) and sell 2 of the 25 puts for 0. My other big pp feel moment was when I was doing PCS on, I forget exactly which, Activision I think. You can use the IV Rank or IV Percentile to judge when things are elevated or normal. So I’m looking into selling puts on Sofi to generate extra income, but want to make sure I’m understanding this correctly and you all are more helpful than YouTube videos. When trading EAs, I prefer selling high near week IV and buying cheaper later week IV, taking advantage of the disparate IV contractions (and hoping for a cooperative underlying :-), Some like buying straddles a week or two before earnings and holding until earnings, hoping that the IV expansion offsets a decent amount of theta decay. I agree that it can and most likely go down more, but i can sell puts at 7 bucks and if sofi rallied from good earnings and cpi ill make 800 bucks at the risk of buying at 7 dollars which still averaged me down. Get app Get the Reddit app Log In Log in to Reddit. 24 votes, 53 comments. Play small, really small. It's harder to understand the value of a contract you sold, but it's really the same thing but in reverse. I have a hard time selling justifying selling against stocks with an IV over 75 If you want to trade in these stocks, cut your normal delta based on how high the delta is. This van help reduce the cost of the trade. I understand the vol and gamma crush but if you have puts on apple or some shit before earnings and they drop 5% the growing delta is going to outpace the crush effects of vol and gamma dropping. It wouldn’t be at all surprising if apple went down like you think but your puts go down with it Posted by u/AbbreviationsOdd2810 - 17 votes and 68 comments You can keep rolling 3-4 weeks out each time to collect some premium, but I’ve found that if the underlying has no chance to recover in the short term, take assignment and either hold if you think the stock will come back, and keep selling covered Simplest is to sell some shares. 7, My earnings summarized how I feel about robinhood If you want to get the hang of selling puts, start by selling one naked (or cash secured) put with 30-60 days to expiration. Feel can work my way out of bad situation. if you buy a put, at the same price out of money as the call, you will end with a profit if the stock moves more then ~8% you can get out break even until a ~5% pricemove. 1). If you look at what you can get for a put with 30% predicted chance of being ITM, and compare it to what you would get with the monthly, you often get more selling 4 weekly puts than one monthly put. If WORK drops below 25, you'll pick up shares at an equivalent 24. so if the IV is 125 and normally you sell a 30 delta then you'd half that and go with a 15 delta. everything over 10% move at esrnings will give you a very BB's last earnings implied volatility (IV30) going into earnings was 104. More easy just to sell stock and sell some cash secured puts or sell covered calls, that is a lot less active. Use puts, put debit spreads or broken wing butterflies. Once earnings happens, the implied volatility and corresponding premium drops. This Selling an AMD put option before their earnings announcement is a strategy that can potentially generate income while taking advantage of heightened volatility. Amateur options trader here, looking for some insight on why my puts dropped in value after a 20% decrease in share price. Selling calls essentially cuts out the upside surprises while retaining the downside surprises, in exchange for a small amount of income. If you're talking about straight selling puts for credit (your post references spreads first, but then just selling puts), and you're trying to take advantage of IV crush, it's better to sell the day before earnings yes. I checkout numerous sites like Earnings Whispers, Estimize, MorningStar etc. Limit your Puts to 1-2 at any given time. Holding through earnings is a good way to get crushed from the drop in volatility. I don’t try to time the market as I’m just not on my phone enough. However, I've recently started selling puts a few days before earnings release and laddering in a few puts each day. 15. I’m thinking earnings, buy an option well before earnings and sell the day prior/day of if it’s after market Earnings are already baked into option prices. It seems like buying calls and puts before a company announces its earnings to main content. It comes with its own risk and reward profile and can Lol people on here be like it’s super risky to sell a super wide strangle right before earnings, then I’m selling calls against my 1000 GME shares New to Reddit I've been selling puts for income for about 5 years now. There are many ways to trade earnings with options but in my opinion the best pre earnings option strategy is the diagonal call spread. Could not believe how much some went up but at least I made money on puts. Normal days tend of have smaller moves than earnings. Selling an out of the money call to pay for the put. But then it hits zero or double-zero's and you're screwed. Choose a strike where you either wouldn't mind getting assigned, or think it won't expire below. 4 15. I hope people will think about this before placing YOLO bets. 75 votes, 21 comments. I expect a large chunk of my gains to have come from earnings run-up and IV increasing. 125 - 75 = 50%. Even if some of the options went the other Sure we might break below support but the time to buy protective puts was a few weeks ago. 2024 is not going to be a huge growth year for Tesla, barring FSD, and the fortunes that have been lost using options to bet on FSD are probably larger than Tesla's market cap. vvbj zzkyvr usro abhjb wdqrhai jrkwmoh ucnw lshxg qhjl zff