Sold the call in my ROKU earnings strangle for 5.70. Bot the strangle for 2.03. Nice 148% profit. Lucky but nice nonetheless.:-)
Here’s some info if you’re interested. https://vimeo.com/238690559
Although I don’t get as involved, I trade some tickers after earnings based on CML backtests. The historical patterns after earnings are not consistent across stocks. Each one seems to have a mind of its own. Also, the returns aren’t quite as dramatic or consistent as pre-earnings. That said, there is money to be made here.
If you’re interested, I highly recommend subscribing to CMLViz (https://tm4.cmlviz.com) so you can do your own backtesting. There are so many variables and only you know what you’re comfortable trading. The recommended designs include straddles, strangles, ICs, calendars, debit/credit spreads, and calls/puts.
I’m happy to share my post-ER spreadsheet. I currently have positions in GOOGL, CHKP, GRUB, LRCX, and SHOP. Closed PYPL for a nice profit. There are lots more stocks to consider but I’m going to be very selective. It’s been tough to profit this round.
My primary focus is on longer-term fuzzies, ratios, flies and SPX short-term trades so earnings trades are on the sideline.
It’s been a busy quarter for pre-earnings trades. I’m still holding positions in BABA, NVDA, and ADSK and watching for new trades in CRM and AVGO later this month. Here’s a link to the Google spreadsheet where I track pre-ER trades. Wins far outpaced losses. Whew!
Is this background supposed to be an improvement? lol
What is your take on the market today? I’d love to know what you see on the NDX and SPX charts.
Opened some of DK’s famous risk twist trades. Typically, you put these on when the market is soaring in preparation for a downturn. In my case, I’m adding to the short side based on the downturn already in progress. Maybe too late.:-)
BTO IWM Bfly Sep21 164p/-156p/154p @ 1.61
BTO QQQ bfly Sep21 175/167/165 PUT @1.85
BTO XLY bfly Sep21 109/104/103 PUT @.85