My position - as always - protect against the downside with put options. It's true that you will not make as much as when you gamble it all on the long or short side, but I do my gambling in Vegas, not on Wall Street.
Going into earnings, I usually pick up straddles. Then, I watch how much money I make... usually, if there's a big move to the upside, I make double the money - my long positions and the long, call options. After the big move, I dump the options and wait for the pullback. Once the profit taking commences, I dump the puts for even more dough.
If the stock dumps to the downside, I make big $$$$ with the puts. I sell the puts after the haircut and buy more shares at the depressed value, since the price is depressed and the buyers will be pouring in at the lower price. Then, once we get the bounce, I sell the call options.
It works for me every time. It might not work for you - timing is everything - and you have to have nerves of steel....that's why I always put the disclaimer.
This strategy drives Yank crazy because I make money both ways. He hates it because he thinks I'm a "long punper" but in reality I'm just a guy who figured it out.
Good luck y'all! See you at the bank!!
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