So I was one of those few people on earth that shorted aapl before the earnings. I trade weekly options. I bought 570 puts before the earnings. So you know how GIDDY I was when AAPL dropped. I started the day waiting to see how much I was going to be up 5xs - 10xs my money? Only to discover the puts were DOWN 50%. How the hell does a stock go from 600 to 575 - and the put goes down 50%??
That is not a scam. I attended a seminar by Schwab and they showed the option pricing chart as a function of time. It showed a spike every three months. The speaker explained that the spike is just before the earning. They day after it goes back to normal. To begin with, buying an option is a high risk approach to trading. Statistically only 10-20% of the option buyers make money. So try a strategy, like bullish put spread or bearish call spread based on what you think is going to happen. This limits your downward risk and upward gain as well. Imagine instead of buying the put, if you had written a bearish call spread, you would have made money. If you do do not know what is a bullish or bearish spread, get a book on options, or go to your brokers website, read up on it. If you cannot grasp the idea, quit buying options and start investing like Buffet
Wise to buy DEEP in the money, where Premium not a primary factor; does cost mash more, but price go very much in same ratio as stock... safer to just hold the stock and sell covered Calls!
Hey Buddy, just listen to Thompson here. He is sort of our Resident Cramer, if you know what I mean. All good stuff there from Thompson. Be careful with Options, too...whole different world.
That is normal for ER events on the first day.Real money on options with ER comes from 2 or more days effect, i.e. if price down or up 2 or more days even at smaller pace, you can hit a jackpot.
Sit tight for $540 the end of Friday!
Sentiment: Strong Sell
I'm still on the "option" learning curve myself but have been successful (so far) making a living solely playing AAPL weeklies ... but ONLY as day trades ... I did get burned myself as you did holding overnight. Continue to learn as I am and you'll be able to tame these beasts.
Have you heard of Implied Volatility (IV) crush the day after earnings? You bought Puts before earnings at very high IV. Then the day after eps, the super elevated IV comes crashing down and so the option premiums. Suggest you read about IV and the Greeks before trading options. Options are tough as is, weeklies are brutal particularly around earnings. Good Luck.
Sentiment: Strong Buy