Wall Street

How to Trade Earnings with Straddles (Featuring Netflix and Tesla)

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The Street

By Market Rebellion Use this option strategy to trade earnings when the implied move is smaller than average! Here’s a way to play earnings by comparing the historic average earnings move of a stock to the current implied move. We’ll use two stocks that are reporting earnings this week as examples — Netflix and Tesla. How to Calculate Implied Move The implied move is shorthand for the amount that a stock is predicted to move up or down (often calculated as a percentage) by the expiration date of the option contract. You can calculate this by adding the premium from the at-the-money call and pu…

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