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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe) -- Ignore unavailable to you. Want to Upgrade?

To: RoseCampion who wrote (2006)10/27/2000 1:48:13 PM
From: KFE  Respond to of 2241
 
Rose,

in your (delta?) neutral spread you wanted IV to rise so you could close at a profit. In this case, of course, it was exactly the opposite effect - the collapse in IV completely overwhelmed the large upside movement in the underlying.

The point I tried to make was that the position would be exited the day before the announcement. I suspect that if you went back 2-3 weeks before the announcement you would see a rise in the IV as the earnings date approached. Only works if there is significant uncertainty regarding the pending announcement.

Regards,

Ken



To: RoseCampion who wrote (2006)3/6/2001 11:57:39 AM
From: Ron  Read Replies (1) | Respond to of 2241
 
Nice to see a bear market rally here, although the weight of constant earnings warnings is a likely context for further shorting by larger players. Here is a good free trading room for folks who would like to be part of an online trading community. Its a small group, but very good folks there:

tradingsummit.com


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