$SoFi Technologies (SOFI.US)$ 50 long calls on SOFI. Funny t...
$SoFi Technologies (SOFI.US)$ 50 long calls on SOFI. Funny thing is the stock is lower than what it was when I bought the calls yet they are up 30% ![]()
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Mike_Lee : Maybe due to increased iv
KubeOP Mike_Lee: yes. I thought the earnings IV was already priced in considering I just bought them earlier this week so it was pleasant suprise.
Hello13456 : Why is this happening, so is it good or bad?
Mike_Lee Hello13456: Earnings are fast, implied volatility is rising, and option prices are getting higher. Nothing good or bad, just a phenomenon
KubeOP Hello13456: It depends on what you want to do. It can be good or bad. During earnings season, investors are speculating on what the earnings results is going to be and because there's a lot of uncertainty, it makes the option premiums very volatile and high volatility means option premiums are going to be expensive. This could a good time to sell options if you own stocks of a company and you think it's going to drop after earnings or sell a cash secured put if you think they will have great earnings.
If you are a buyer then it's a risky play and I'm fully aware of it. I don't usually trade going into the earnings but this one is an exception and I'm willing to fully lose this amount that I put into those calls. It's risky if you buy very close to earnings because there's a lot of uncertainty and once the results are out, everything becomes more clear and the volatility will drop significantly which means option premiums will drop and if the stock didn't move anywhere or moves even slightly against your direction, then your options will get wrecked...otherwise know as IV crush. So for me, since my calls are already up 30% going into SOFI earnings I have a bit of a buffer which is nice.