StockFetcher Forums · General Discussion · ultimate option play earnings strangle-wall streets best kept secret<< >>Post Follow-up
MARY4MONEY
806 posts
msg #47360
Ignore MARY4MONEY
10/7/2006 10:34:49 AM

you can do a single or up to 5 strangle meaning you playing the calls and puts 1-5 level above and below the current stock prices-using this strategy on the last 14 earnings in last 10 days- you would of won on all of them or 100% and once a stock get going up on good earnings and if it is in sync with the market you can use an intraday setup of rsi(2)on 15 minute bars with lr and volume and make 100 s of 20-1000% gains- right before earnings you buy a put below the closing price and an call above it- and depending on its 100 day and 5 day hv- you can play 1-5 position on each side like you could of done on rimm. before earnings while rimm at 86$ buy the 90-110 oct calls and the 80 and 75 puts for oct- well i bought the 75 puts for .55 with 50% of my money and with the other 50% i bought the 100-110 calls for 0.90 0.30 and 0.05- well the 100 call at it high yesterday was worth 15$ the 105 was at 10$ and the 110 was at 4.80- the average % move on the earning stocks is 18% in <5 days- you only need to have a 5% move either was to break even- the average gain on the strangle one call above and one put below is 350% average for the above 14 stocks- like on rimm 90 oct calls were 1.20- it went to 21$ and the 80 put was 1.05- if you had invested 1000$ in each you would be 18000$ ahead yesterday- on the mu earnings on thurday it closed to 17.54 - so you bought both the 18 call and 17 put for oct were both 0.60-- the put is now at 1.90 now so that mean your 2000$ would be worth 3100$ now and that was after the 1st day- the higher you go in stock price the more you can make-here are a few trades i bought on 10-3 and sold on 10-5 bought for about 33000$ and sold for about 160000$ for an easy 500% gain--have the ultimate trading sytem- up average of 755% on 14 rimm oct calls since before earnings- who would like to know how to do this- the folling is my trade history just on 10-3---10-5 - 2 days 10/5/2006 1:41 PM 16935524 Sell_To_Close Call RUP JB 181 $3.30 $336.74 $59,393.26 $219,256.10
10/5/2006 1:41 PM 16935522 Sell_To_Close Call RUP JC 500 $1.50 $894.99 $74,105.01 $219,592.80
10/5/2006 1:41 PM 16935520 Sell_To_Close Call QQQ JP 1000 $0.25 $1,769.99 $23,230.01 $220,487.80
10/3/2006 12:25 PM 16884432 Buy_To_Open Call BNQ JX 666 $0.15 $1,185.49 $11,175.49 $87,407.79
10/3/2006 12:04 PM 16883778 Buy_To_Open Call RUP JB 181 $0.55 $336.74 $10,291.74 $89,498.28
10/3/2006 12:03 PM 16883758 Buy_To_Open Call QQQ JP 1000 $0.10 $1,769.99 $11,769.99 $94,835.02
10/3/2006 12:01 PM 16883706 Buy_To_Open Call RUP JC 500 $0.20 $894.99 $10,894.99 $99,105.01

rupjb--0.55-3.30-500% gain rupjc--0.20-1.50(actually went to high of 3.70 after i sold it)--650% qqqjp--0.10-0.25--150% gain





maxxam80
108 posts
msg #47367
Ignore maxxam80
10/7/2006 4:29:06 PM

"the average % move on the earning stocks is 18% in <5 days"

is this beofre or after earnings?

before earnings I thought option mm's priced in high volatility making straddles useless. This is what all most books say.. but if you meant afterwards then that is ok


MARY4MONEY
806 posts
msg #47372
Ignore MARY4MONEY
10/7/2006 11:50:50 PM

no you buy your options right before the earnings annoucement- at the close if it at the open the next day and at the close if its after hours- basic rule is to buy them the last 30-60 minutes of trading before their earnings is released


judgetrade
106 posts
msg #47374
Ignore judgetrade
10/8/2006 7:35:08 AM

Goodness, I thought I was stupid, now I (think) I understand your strategy.

___________________________________________

Summary of you post:

- Before right before Earnings Announcement
- Buy put and call
- Depening on the volatility of the stock you play 1 - 5 positions above and below the option ladder.

Example Rimm:

Rimm 86
50% of the money in Put 75
50% of the mones in Calls 100 and 110
Average Win of the stock 18% in 5 Days
You need a 5% Move to break even with this strategy

The last 14 Trade-Setups made 350% on avearage
___________________________________________

The reason why it works (my assumtions):

1. You can win more then 100% with the call, but you can only loose 100% with the put

2. The option modells are plain wrong (even the guys who inventet it got a novel price for it) because it assumes that the price swings of stocks are based on the normal curve (normal distribution), that means that the implied volatility of the options before earnings is too low, especially before earnings release, because afterwards the price swings are cracy and beyond every normal distribution curve.
_____________________________________________________________

Mary, thank you very much for posting this strategy, I will have a look into it!!!

Best Regards

Andreas




judgetrade
106 posts
msg #47375
Ignore judgetrade
10/8/2006 7:52:21 AM

Mary,

what earnings release calender do you use and which markets do you play (Nasdaq, etc.)

Thank you
Andreas


maxxam80
108 posts
msg #47377
Ignore maxxam80
10/8/2006 11:59:23 AM

so five days after the day before earnings is when the 18% average move is?


markcrisp
187 posts
msg #47386
Ignore markcrisp
10/9/2006 11:00:52 AM

Yeah works sometimes and not others......

Why not give us a live example? I think you'll have some big wins and big losses. Will it make money over say 20 trades? That's the question.


maxxam80
108 posts
msg #47393
Ignore maxxam80
10/10/2006 5:53:14 AM

well losses tend to be really quite small with straddles the only losses you can get are volatility decreasing and time decay


lvainik
52 posts
msg #47413
Ignore lvainik
10/11/2006 11:35:55 AM

Mary4Money
What is your email?
Thanks!



cello13
88 posts
msg #47425
Ignore cello13
10/12/2006 3:31:38 AM

Look for another thread of Mary4Money. It's mentioned there...


StockFetcher Forums · General Discussion · ultimate option play earnings strangle-wall streets best kept secret<< >>Post Follow-up

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