Overview On May 10, 2024, I executed an options strategy by selling one LEAP AI $C3.ai, Inc.(AI)$ cash-secured put option with a strike price of $22.50 and a maturity date of September 20, 2024. This strategy allowed me to collect a premium of $297 upfront. The position was closed on May 30, 2024, for $135 after AI stock surged to $28.57 following its earnings announcement. This investment reflection outlines the rationale, execution, and outcomes of this strategy. Strategy Rationale Selling a cash-secured put option was chosen for its potential to generate income while taking on limited risk. Here’s why this strategy made sense: 1. Income Generation: By selling the put option, I received an immediate premium of
How to Profit from IV Crush in Earnings Season?
During earnings season, IV Crush refers to the sharp decline in implied volatility (IV) after a company's earnings report. Before earnings, IV rises due to uncertainty about the outcome, causing option prices to increase. After the earnings release, this uncertainty dissipates, leading to a rapid drop in IV. This decline impacts options prices, often causing them to decrease even if the stock price moves favorably. ----------------- How to take advantage of IV crush in earnings season? Share your experiences!
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