print-icon
print-icon
premium-contentPremium

Goldman Has Identified The Most Profitable Earnings-Season Trade On Record

Tyler Durden's Photo
by Tyler Durden
Friday, Feb 04, 2022 - 05:53 PM

Yesterday, ahead of Amazon's earnings, which option implied-volatility suggested would see a 5.1% swing today, we said that buying a straddle seems like a pretty good idea...

... because when looking at the wild afterhours, post-earnings swings in stocks like Facebook, Alphabet, and Microsoft, we felt that the option market was wildly underpricing the extent of the move in Amazon stock. And since a straddle covers both upside and downside cases, one didn't need to predict the direction of the move, just the magnitude (i.e., "moar").