2. Playing Earnings Reports
Earnings reports will be the focus of Wall Street as
investors wait for companies to show increasing profits
throughout the year.
One way to play these key barometers is to use a
strategy called a straddle.
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3. This strategy is involves buying options without
buying stocks.
Calls allow you to make a profit when a stock goes
up, and put options allow investors to profit from the
downside.
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4. The straddle involves buying calls and puts before the
earnings reports in order to profit from the movement
in the stock.
The risks involved in the trade is that if the stock does
not move.
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5. Also you want to place the trade on with low implied
volatility of the options.
As a decrease in volatility can hurt the trade.
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