Tips for IV Crush Strategy?

G

Greenhill

New member
Hi! Straight to the point.
I have been testing out a new strategy for a week, where I short options strangle the day before earnings come out, and buy back after the market has opened again and earnings have come out (IV Crush). This has worked well since IV is racing down after earnings, out of a total of 14 trades, only 1 of them has been a loss. Have any of you in here experience with this strategy and could give me some tips. I also have the following questions:

1. What amount of open interest and volume should there be on the options to be sure that I can buy them back after shorting them.
2. Why do option prices sometimes rise after earnings when Implied Volatility rages down?
 
J007RMC

J007RMC

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2019 Donor
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Huhm, I trade fol other than I taken his green goose training course overnight gaps on spy. So I enter before close thasamet is the best time to enter an options trade because theta is minimally a concern if your out quick looking at 50-60% gain.. if gain at open is say more like 100% I set a trailing stop below option price of 10% so I trade weeklies. But I'm also looking at a delta close to 50 for spy. But then again I use the 1--20,-30 [10-30 dance] smas as a backup with relation to Bollinger bands. Hope that helps. ER IV Crush..... I try to keep my delta as low as possible if I'm in an extended swing trade. so its not uncommon to sell and buy at lower neg delta on swings, good page to view where he mentions the 10-30 dance..... I have no affiliation with Michael other than having taken his green goose course. This is me just what I do, I dont suggest anyone do the same unless they have training within this system.
 
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T

trader57

New member
Hi Greenhill,
I do an earnings strategy where I buy way ITM call, same week long put and short call in the future but its not working when stock goes against me.
I want to understand your strategy; when you short the strangle, you get premium based on expected move, but if stock goes farther than expected, that is when there is a chance of loss, do I understand it right? do you sell naked call and put or do you sell like iron condor? Thanks.
 
J007RMC

J007RMC

Active member
2019 Donor
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Hi my strategy is to hold overnight but I usually buy sell calls/puts or straddles if I need to roll it out so I can stay delta neutral, or take no more than a ten% loss and move on. My good trades outweigh the bad for ROI.. I like the overnight gaps strategy works for ER too. Straddles if I'm not sure how to play the overnight gap
 
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