Trading the big news & up/downgrades

[Hopeful]

Anybody here trade the big news?

I was just a thinkin' (gives me a headache) that when big news come out on a stock that it's options IV probably goes off the radar. Why not sell that high IV (sell options) and when IV settles down again buy the option/s back! Of course you would need protection such as buying an ITM option should the stock break away (go up to fill the gap, or go down further) from the gap up/down.

I'm a genius, I know I know...

 

[wayneL]

Anybody here trade the big news?

I was just a thinkin' (gives me a headache) that when big news come out on a stock that it's options IV probably goes off the radar. Why not sell that high IV (sell options) and when IV settles down again buy the option/s back! Of course you would need protection such as buying an ITM option should the stock break away (go up to fill the gap, or go down further) from the gap up/down.

I'm a genius, I know I know...

Generally, IV will increase prior to the news release, and be immediately crushed on the release of the news.

On another matter, get yourself a strategy modeller. It will help.

 

[nioka]

Buy on bad news. Sell on good news?????

 

[Hopeful]

Generally, IV will increase prior to the news release, and be immediately crushed on the release of the news.

On another matter, get yourself a strategy modeller. It will help.

You pointed me to an Excel-based strategy tool already, is that all I need for now? (I can't change the values in the stinkin' thing yet, but I haven't tried very hard yet).

To the other guy who said buy the rumor, sell the news: I'm talking about big news stories that cause the stock to gap up or down by a huge amount catching everyone unaware. If the news had already been hinted at then there wouldn't be such a huge gap, so I don't think that that market mantra would work.

 

[yogi-in-oz]

Hi hopeful,

..... you may well be in close proximity to some
BIG news being made, in this coming week ... !~!

DOW breaks through 12,000 and market spruikers
are all too positive ..... some contrarians would say, that
the markets are primed for a negative surprise ... yes???

have a great weekend

yogi

 

[smoothsatin]

You pointed me to an Excel-based strategy tool already, is that all I need for now? (I can't change the values in the stinkin' thing yet, but I haven't tried very hard yet).

To the other guy who said buy the rumor, sell the news: I'm talking about big news stories that cause the stock to gap up or down by a huge amount catching everyone unaware. If the news had already been hinted at then there wouldn't be such a huge gap, so I don't think that that market mantra would work.

I think the point being made was that the "inside" money is focused on options/derivatives because that's where the most money can be made.

 

[Jadefox]

Hi hopeful,

..... you may well be in close proximity to some
BIG news being made, in this coming week ... !~!

DOW breaks through 12,000 and market spruikers
are all too positive ..... some contrarians would say, that
the markets are primed for a negative surprise ... yes???

have a great weekend

yogi

Hi Yogi,

If you don't mind elaborating - I'd be only too pleased to have a glimpse into the short term future via some gann/astro-analysis.