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Far_Introduction527 t1_j9bvmhz wrote

Reply to comment by iWriteYourMusic in Just want to get to the carvana earnings s*** show by rocket_man19

Just curious, how would you profit off it NOT moving as much as that? since they seem to really be pricing in a big move. Even if it's shit, I doubt it'll move THAT much. Hell, it went up 4% today, so that is an extra 4% it has to un do as well lol.

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iWriteYourMusic t1_j9bvvy3 wrote

You wouldn’t. I think there are some good options calculators out there that can help you simulate IV crush. I don’t remember what the are. Personally if I feel like gambling earnings I do shares so I can get out during the big AH move. I want to go short CVNA and a BYND eod on Wednesday but I’m not sure I have the stones.

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Far_Introduction527 t1_j9bzilo wrote

Just wondering.if you can take advantage of a crush. (guessing only writing them then)

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MustWarn0thers t1_j9ce260 wrote

I think taking advantage of crush would be selling the options themselves, whether it be cash secured puts or share secured calls. Increased premiums.

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iWriteYourMusic t1_j9csv8g wrote

I would say you could buy the puts/calls a couple months before earnings and then sell the day before earnings report.

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Far_Introduction527 t1_j9d92w5 wrote

One thing I have always wondered is how soon do they price the options for an earnings?

Like how early do you need to do something like that? I love earnings plays, but when I KNOW it's gonna move SOME direction

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AnimeCiety t1_j9du28h wrote

Then you’re also dealing with time decay. You may not break even despite higher trending IV if time to expiry offsets.

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Werdna168 t1_j9dzvdv wrote

Straddle or strangle or the ever more secure iron condor.

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The_Punicorn t1_j9gzvm0 wrote

If your bet is it won't move that much, selling CSPs would let you take advantage of the premium. But your fucked if it does move.

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Far_Introduction527 t1_j9h0bz4 wrote

Yeah writing options is like shorting. Limited upside unlimited downside. I don't write em.

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The_Punicorn t1_j9h0uh1 wrote

Only selling Naked Calls have unlimited potential loss, and selling those is pure fucking greed. Your losses should be capped on any of the other writes.

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