Proof That Implied Volatility Drops After Stock Earnings



http://optionalpha.com - Before you start making earnings trades it's important to understand the "why" behind what we do. In general, we make earnings trades to potentially profit from an IV crash that happens following the company's announcement. Before a company announces earnings you will generally see the implied volatility of its options increase as the one-time binary event draws closer. After the event has occurred, there is less fear or unknown in the market and therefore implied volatility will drop quickly for the underlying options. As traders we can tailor specific options strategies to profit from this one time event in any stock. In this video we’ll show you some examples to prove the IV crush theory. ================== Listen to our #1 rated investing podcast on iTunes: http://optionalpha.com/podcast ================== Download a free copy of the "The Ultimate Options Strategy Guide": http://optionalpha.com/ebook ================== Still working a day job? Then our "Take 5" segment is for you. 5 mins videos each day on 1 thing you can apply trading options: http://www.youtube.com/playlist?list=PLhKnvfWKsu40z0EnsX0TNqCgUzb8tmM04 ================== Start our 4-part video course (HINT: these videos are NOT posted anywhere else online): http://optionalpha.com/free-options-trading-course ================== Just getting started or new to options trading? Here's a quick resource page we made that you'll love: http://optionalpha.com/start-here ================== Register for one of our 5-star reviewed webinars: http://optionalpha.com/webinars ================== - Kirk & The Option Alpha Team

Comments

  1. so, it will be a high probability to make profit if we sell call before earnings ?


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