Immediately after earnings the stock price jumped up over 12% (to 5.17). Since then the price has come down and is now hovering around 4.22. I pivoted and sold put options for a December expiration at a 4.50 strike price.
I’m just as disciplined when selling puts near earnings. Here are the guidelines I apply:
1. Transact after earnings announcement.
2. If earnings and outlook are good, it’s probably a good time to sell a put.
3. If top analysts raise price targets, chances are stock will not go below pre-announcement price.
4. Sell a put at a strike price near where the stock was at pre-announcement.
5. If I stock price goes at or below strike price and I end up buying the stock I would have bought it for a good price.
Doing an options trade before an earnings announcement can make much more money however, I find that trading after is lower risky and offers a more consistent upside. I say in life and in trading, the more info you have, the more money one could earn. 🙂
