Have you ever tried/considered a Straddle for earnings?
Or even a strangle near ATM? For example, FedEx was at $300, open $290p/$310c (9/27) cost $1500, turns to $3500 after earning's or $2k profit per set.
That's 133% of original debt paid without even selling short legs, which would've given $130 in premium and reduced overall cost by nearly 10% if sold $260/$340 strikes turning into double diagonal.
Building intrinsic value is the main goal, if there's a big IV crush there's still a week left and strikes pretty close to ATM, can turn into a vertical spread or close for probably 50% loss so can manage. However, after earning's one side should have a contract deep ITM presenting lots of intrinsic value.
(Out of double calendars, double reverse diagonals, and double diagonals it seems double diags are best paying more upfront but creating a structure which can truly capture the earning's directional move acquiring intrinsic value.)
Straddles/Double Diagonals For Earnings Any Veterans?
byu/breakyourteethnow inoptions
Posted by breakyourteethnow