Yahoo is to report earnings i think it is due to shock wallstreet and go up,
anyone else feel that way
2006-10-16 06:26:56 · 3 answers · asked by sligoman 4 in Business & Finance ➔ Investing
Personally, I wouldn't recommend trading YHOO directionally over earnings unless you know and accept that it's purely gambling and not trading.
That said, if you think it'll move a lot, run the numbers. Be sure to look at past performance to give you an idea how far it might move, and see if it'll cover the cost of the options you plan to purchase.
I would do a straddle, but you'll want to check directionally too (since you were considering that), as you want to make sure that your reward/risk ratio is acceptable and within your rules.
Last quarter, doing a front month straddle would have yielded good returns on YHOO's earnings.
It IS one of the many stocks this quarter that I'll be considering trading a straddle on depending how expensive the options are vs. where I think the stock'll go to.
Oh, and fyi, it's holding 24 pretty well, but my gut says it'll go down. But, that's why I straddle, so I don't have to "guess" which way it'll go!
Good luck!
2006-10-16 06:38:34 · answer #1 · answered by Yada Yada Yada 7 · 2⤊ 0⤋
The chart looks horrible. Based on it, I wouldn't go long on YHOO stock. Still, your action is a short term gamble (rather than trading with odds in your favor), and as such "random variable", any outcome is probable.
If (still) you have intention to take such a position, you may want to manage your risk appropriately (i.e, allocate only a small portion of your capital to such "plays").
Good Luck.
2006-10-16 15:26:00 · answer #2 · answered by theshortfox 1 · 0⤊ 0⤋
If you want to make some money, the short the calls. they will drop after the report comes out, this is a very short term position to do. 1 day mabe two.
2006-10-16 13:31:19 · answer #3 · answered by Anonymous · 0⤊ 0⤋