The third quarter earnings cycle just concluded couple weeks ago. In this two part post, I'd like to reflect on some of my earnings trades - the good ones :-)
An earnings cycle which typically occurs four times a year, for four quarters, presents a good opportunity for premium sellers to get engaged and gain some money from the increased IV.
We are living in a low volatility environment (with VIX hovering at a range of 10 to 12 for a good part of the year). Unfortunately, in a low volatility environment the opportunities for us premium sellers to be successful is extremely low.
Here is my go-to recipe for earnings trades:
Here are a couple of trades from this earning cycle. Please click on the image to see details of the trade:
I've posted 5 successful earnings trades above. Or as Tom (at TastyTrade) would call it "winner, winner, chicken dinner".
That was easy, right...? Well, not so fast.
Things worked out well on these trades, but there are trades that don't always go the way you'd like them to. That's why the topic of this blog post is 'Good Trades'!
In the next post, I'll highlight some 'Bad Trades' and show how I try to repair trades gone astray.
Thank you for reading! :)
Ninteen year-old trader, future connoisseur of options.
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