Simple and potentially profitable, but... makes it a binary result... it is extremely hard to protect the trade if it goes against you - with a bit of time left... better to do earnings plays via multiple calendars or diagonals - with better profit/risk/management possibilities ratio :)
What did we really leave here. Most option traders know that IV is higher around earnings. What would have been more helpful is what deltas do you choose, what is the width of the spreads, and when to close. Don’t just tell people general info. Give us the details.
@@Dori_1111 Well they want you to sign up for their course, of course! :) But i have made some money with these trades. Those little bits add up also. And yes you sometimes lose. Objective: winners/profit to outpace losers/loss!
I almost blow my account by shorting s&p 500 and long put. The way that the market move up trapped my position and it's never look back. I thought I made a of money but at the end I lost 50% of my account size.
LoL .. A giant profit zone at a giant $20,000 trade requirement for a 'potential' $52 profit. No thanks. Just one bad earnings report with a trading regime like this will take a very long time to recover losses.
The $52 was the example of what you get when you aren’t near any earnings announcements. $920 was the credit for the trade around earnings. (Both had a collateral requirement of $5,000 x 4 = $20,000)
Needless to say you must be trading with zero trading costs since this example trade is opening the trade with 16 contracts. But there are better ways to make $52 (or less with commissions) using $20k.
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Simple and potentially profitable, but... makes it a binary result... it is extremely hard to protect the trade if it goes against you - with a bit of time left... better to do earnings plays via multiple calendars or diagonals - with better profit/risk/management possibilities ratio :)
What did we really leave here. Most option traders know that IV is higher around earnings. What would have been more helpful is what deltas do you choose, what is the width of the spreads, and when to close. Don’t just tell people general info. Give us the details.
Have done similar trades to this myself
Gotta look out for those Amazon wild swings though! It's a big stock!
@@Dori_1111 Well they want you to sign up for their course, of course! :) But i have made some money with these trades. Those little bits add up also. And yes you sometimes lose. Objective: winners/profit to outpace losers/loss!
🙌
I almost blow my account by shorting s&p 500 and long put. The way that the market move up trapped my position and it's never look back. I thought I made a of money but at the end I lost 50% of my account size.
Picking up nickels in front of the earnings steamroller.
920$ potential gain (before transaction costs) for 20,000$ potential loss....not a GIANT risk adjusted return...
Have a great day
You too Yasir!
LoL .. A giant profit zone at a giant $20,000 trade requirement for a 'potential' $52 profit. No thanks. Just one bad earnings report with a trading regime like this will take a very long time to recover losses.
Required buying power is 5000 USD in this case
@@jakubnosek146 Ani náhodou, byly to 4 kontrakty. Riskovat 20k USD kvůli 52 USD zisku, je dost hustý. 😆
@@ChainsJoe 4 contracts, OK! Ad 52 USD - depends on risk... but true is that 52 USD is not a lot :)
The $52 was the example of what you get when you aren’t near any earnings announcements. $920 was the credit for the trade around earnings. (Both had a collateral requirement of $5,000 x 4 = $20,000)
Needless to say you must be trading with zero trading costs since this example trade is opening the trade with 16 contracts. But there are better ways to make $52 (or less with commissions) using $20k.
What a terrible strategy. Guaranteed to loose money. Only winners are the brokers and people who run courses! Stay away!