iv crush strategies
- Buy an options contract on a stock that’s around 20-30 days out from reporting their earnings.
- As earnings nears, premium paid on the stock will increase as the implied volatility intrinsically increases.
- The premium paid on the stock option is highest 1 hour prior to a earnings call.
- If you sell the stock that you had bought, 20-30 days out, you will make a profit even if the underlying stock traded flat.
- Sell an iron condor on a stock option about 1 hour before before earnings
- Premium on a stock is highest around 1 hour before an earnings call.
- Consequently the amount of credit you can receive from options strategies such as straddles and strangles, or iron butterflies and iron condors is highest just before an earnings call.
- Volatility and premium prices most times fall the day or moments after an earnings call release.
- Therefore buying back the contract now as premiums are as much as 3x lower has a higher probability to net you a significant profit.
IV Crush Strategies Conclusion
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