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I constantly own LONG CALLS that are ITM or DITM.
As the earnings date approaches, I would like to keep my long position held
through the earnings date. This is because most of my good stock picks
have strong earnings and subsequent splits that rally the stock even
further. I am willing to risk the earnings volatility.
If my current call is ITM or DITM...I would like to take action the DAY
BEFORE earnings to protect myself a little bit on the volatility of the
stock in case in turns downward after the earnings. What alternatives
should I consider?
()Write a call the day before earnings? I guess that would turn it into a
bullcallspread. Then LEG OUT of the transaction after earnings are
announced.
()Buy a PUT. The premiums are very high the day before earnings. Since I
already have an ITM call, an ITM PUT would be a waste of money, wouldn't it?
()Just close out the CALL position. Wait for the voliatliy factor to drop
AFTER earnings are announced, and then start a new open position
PERAHPS, If I am bullish on a stock several weeks before earnings, would it
have better to start my opening position as a SELLPUTTOOPEN rather than just
buying LONGCALLS. That would then allow me to take advantage of the high
premiums ONE DAY BEFORE EARNINGS and thereby SELLCALLS the day before
earnings to protect me.
ANY FEEDBACK would be appreciated.
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