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1- Options & Earnings - A new thread!
Every option rises in price in anticipation of earnings. This is related to the increase of anticipated volatility (yo vega, she's back).
#fintwit #mintwit $option $AG #option #optiontrades
Every option rises in price in anticipation of earnings. This is related to the increase of anticipated volatility (yo vega, she's back).
#fintwit #mintwit $option $AG #option #optiontrades
2 - But why?
Actually it's simple: earnings are a casino event for the stonk. Nobody knows what will happen, will the stonk crash or rise? Earnings are thus binary, it's a yay or a nay (UK ref. for you @BuyingMyFreedom). Movements post earnings are stronger as well.
Actually it's simple: earnings are a casino event for the stonk. Nobody knows what will happen, will the stonk crash or rise? Earnings are thus binary, it's a yay or a nay (UK ref. for you @BuyingMyFreedom). Movements post earnings are stronger as well.
3 - Here comes Mr. Market Maker. Mr. MM knows this, and they want more money for these call/put options, since they have to secure themselves against more risk.
Makes sense, in classic markets, I sold options on my underlying stonk for premium (#coveredcall).
Makes sense, in classic markets, I sold options on my underlying stonk for premium (#coveredcall).
