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05:53AM (15 mins delay)
Nov 06, 2009 - 11:41 AM EST
Marco Hickey submits:In my last three blog posts, I listed some stocks which I would be willing to go long by selling the puts right before the stock reported earnings. Keep in mind, these were companies which I believed would have a positive reaction to the earnings. However, if the stock moved sideways on the number. this strategy would still likely return a gain the following day. This is because I am taking advantage of the increased levels of implied volatility factored into the option premium before earnings.
If you missed them, be sure to check out my October 19 blog post here, October 21 blog post here and my October 26 blog post here. So far this earnings season, the overall results have been very positive, even on eBay (EBAY), which sold off nearly 10% after earnings. I was able to purchase back the put options (closed the position) for a $4 per contract gain the following day. The best results are of course when the stock has a very positive reaction to the report and pops.
Source: Seeking Alpha (Nov 06, 2009 - 11:41 AM EST)
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