Lesson Overview

Buying Ahead of Earnings Expansion

If we know that we can profit from higher implied volatility levels heading into an earnings announcement then a rational question would be, "Can you take advantage of expanding volatility heading into earnings?"

In this video tutorial we'll give you multiple examples of why you may not be able to buy options ahead of earnings implied volatility expansion and why focusing all of our attention on the IV crush that happens the day after earnings is a much better use of our capital and time.

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  • Did you catch the typo on the first slide? It was a late night and I clearly didn’t read over it but you all get the gist!

  • Got it updated and thanks for letting me know Kevin – sometimes I just import the wrong video into the player. PLEASE let me know if you find any others! Thanks!

  • Just tells us the IV rank percentage and the recent stock move.

  • Depends on a whole host of things really but either are fine as long as you can get outside the expected move.

  • But the main question is this: how do you know this time it WILL have an increase? Our backtesting shows this is less than reliable to guess and assume some will vs others won’t.

    • Lance Ehrhardt

      Ok, thanks Kirk

  • It’s all about current IV – if it’s high and likely to drop then trade it – if not, skip.

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