Humble Posted April 16, 2015 Posted April 16, 2015 NFLX announced earnings today after the close. Couple hours before the market close, I got a following trade alert from one of options sites I follow: Trade: SELL -1 IRON CONDOR NFLX 100 APR 15 520/522.5/427.5/425 CALL/PUT @.91 LMT [TO OPEN/TO OPEN/TO OPEN/TO OPEN] Trade Explanation: For the Volatility Advisory in NFLX, we are selling the Apr 427.5 puts and 520 calls and buy the Apr 425 puts and 522.5 calls for a net credit of $0.91 to open. Underlying Price: $474.22 Click here to view the article Quote
Guest Posted June 6, 2015 Posted June 6, 2015 My thoughts exactly, pre earnings volatility levels often give rise to 4 - 6 x the normal daily estimated move on many popular stocks so relying on volatility crush alone without consideration for the price move is a futile strategy. A safer approach used by some, is to sell an unbalanced butterfly (i.e. a short butterfly) with a narrow gap in the profit zone ATM, despite having long vega, it at least offers protection provided the move is significant. Quote
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