Goldman Sachs Debunked: Long Straddles Into Earnings | Market Measures

Debunking a Goldman Sachs study about long premium into earnings announcements. See more videos from the Market Measures Series: http://ow.ly/PFb57 In the second part of an in-depth backtest, Tom and Tony look into going long premium prior to earnings. The analysis is in response to a recent Goldman Sachs study mentioned in Barrons. The research team looked at buying premium five days before an earnings announcement and selling after the announcement in stocks priced above $100. The results show that the strategy is not a profitable one, contrary to Goldman Sachs' results. The study quoted in the Barron's article stated the strategy was profitable in five of the last eight quarters, which was also shown to be false when the study was scaled up. It's not always easy to take the measure of a market, whether you've been trading for a day or a decade. On this segment we look under the hood—options probabilities, volatility, trading strategies, futures, you name it—so your trading mechanics are built to manage more winners. You can watch a new Market Measures episode live and check out all previous episodes everyday at http://ow.ly/EoyGW! ======== tastytrade.com ======== Finally a financial network for traders, built by traders. Hosted by Tom Sosnoff and Tony Battista tastytrade is a real financial network with 8 hours of live programming five days a week during market hours. Tune in and learn how to trade options successfully and make the most of your investments! http://goo.gl/EaF69C Subscribe to our YouTube channel: http://ow.ly/EbyTn Watch tastytrade LIVE daily Monday-Friday 7am-3:15pmCT: http://ow.ly/EbzUU Download our mobile app, Bob the Trader: http://goo.gl/zgIyco Follow tastytrade: Twitter: https://twitter.com/tastytrade Facebook: https://www.facebook.com/tastytrade LinkedIn: http://www.linkedin.com/company/tastytrade Instagram: http://instagram.com/tastytrade Pinterest: http://www.pinterest.com/tastytrade/

Comments

1. While I agree with the presentation, but in general, if there's no such thing as a price anomaly, then doesn't that undermine the purpose of your channel?  Wouldn't all short term trades yield $0 in the long run, or am I misinterpreting what is meant by "anomaly".