You then close the position right after the EA by buying the option back much cheaperĭue to the significant drop in IV that occurs after the mystery of the EA disappears. Theīasic trade idea is to sell put or call options right before the EA, collectingĪ credit when options premium is very high due to elevated implied volatility (IV). Low-to-moderate price moves (≤4%) following their Earnings Announcements (EA). The Volatility Crush strategy is used with stocks that typically experience relatively Volatility Crush Strategy - Best for Options Traders
Earnings Date Start Date : Current Date + -1 Day.The screen includes those stocks whose Earnings just came out in last two days. Stocks exhibiting negative post-EA price moves are sell/short-candidates.Stocks exhibiting positive post-EA price moves are buy-candidates.This popular StockEarnings screen below will give you a list of stocks that historicallyĮxhibit significant price momentum following an EA for the next seven days: If you see postĮA-momentum is halted or reversed by a significant opposite move, re-evaluate your The 7-10 day scenario is the maximum trade hold-time. Important: Ride-the-Wave is predicated on significant price momentum triggeredīy an EA. then buy-to-close after 7-10 days, or possibly earlier if a desired price target.near the close of the following day for a post-market-EA.near the close of trading the EA-day for a premarket-EA.short a stock one day post-EA if a stock reacts negatively post-earnings:.Sell-to-close after 7-10 days, or possibly earlier if a desired price target is.Near the close of the following day for a post-market-EA.Near the close of trading the EA-day for a pre-market-EA.Buy a stock one day post-EA if a stock reacts positively post-earnings:.Ride-the-Wave targets multi-day price momentum following a company’s earnings announcement Ride-the-Wave Strategy – Best for Stock Traders
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