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Former Options Trader !!!
Join Date: Feb 2003
Location: Bucks County PA
Posts: 6,757
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Earnings today should be interesting.
The MAY ATM straddle (131 strike ) is priced right around 9.85 cents. Just to keep it simple call it 10 bucks. At that price the market is looking for a 7.6% move give or take. There is some time on this one. Last earnings we were looking at the straddle that expired a day or two later.
As I have noted in the past, my preference is typically to sell these straddles into earnings and if I am wrong then trade around them. In this case based on what I have been seeing and reading I think the play is to be long the straddle, I get the feeling this one deserves more premium than the 10 bucks. I am not so inclined to be buying 10 dollar straddles so I'll probably pass.
Should be very interesting.
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