This weeks trades:
Monday- Had carried profitable Infy820CE(21k) without booking profits thinking it will rise after results. It has gone down. Averaged it everyday..!!! Not booked losses yet.
Over the week, kept buying and selling Infy750PE, which I had bought for purpose of hedging 820CE.
I always avoid buying options before a result. People generally do it thinking it might rise if results are +ve, but mostly if there is a good news it is always factored in (insider news/traders). So, a +ve news
mostly wont make it rise much further.
The strategy which works mostly i have seen is taking advantage of IV crush on day of result:
- Check the IV percentile, mostly it will be high
- Sell both calls and puts maintaining a delta neutral position (a day or 2 before results depending on IVP)
- Wait for the result to get declared and take advantage of IV crush
- Square off the same day, and avoid carrying forward the position.