Thread by @yogeshnanda1

Thread on pre-earning trade:
Purpose : Earn from IV crush post result as uncertainty is over.
Which stocks: stocks with higher IVP(Iv percentile) and historical volatility lower then IV
Strategies: can do straddle or strangle / low risk iron fly or iron condor (1/n)

How i play? : iron fly for overnight results (save from gap up like wipro/infy) and
straddles for results during market hours
This all is available if you google it : but key is how you manage post result.
no standard way to react so have your plan ready before trade.(2/n)

Have all scenarios chalked out
Will explain with example of sbi trade:
Sbi result was in market hours.
Trade taken: sold 190 straddle for 23 RS.
Target: 4- 5 rs decay
Breakeven level: 213 & 167
(3/n)

My Plan:
Reaction 1: on breach of level 184 or 196 roll winning side by 5 points and get 2 point extra credit - now revised credit 25 points

Reaction 2: on breach of 175 or 205 level buy hedge on side where it moved - in form of spread.. and do 1 more roll by 5 points
(4/n)

Eg. on breach of 175 level buy 170 pe and sell 150 or 155 pe & roll down ce to 180 level.

If no recovery - Now we are hedged till 150 on downside with small loss - can be recovered by selling call spread
(5/n)

If recovery - exit in profit when price reach back to 185 level.
Real trade already in money by 3 points - will share final outcome once close trade
(6/n)

Forgot to add 1 point - check liquidity in stock options before entering.

Price still at 190 level so straddle price down to 19 from 23 level.. already in profit by 4Rs.

SBI - Booked today for 5 Rs profit..but will tray to paper trade - and see waht plan our original adjustment path gives