I mentioned on Wednesday that this was a good time to sit on the sidelines as earnings approaches, and that’s still the view.
And like on Wednesday I also show more about implied volatility and how that reacts around earnings, highlighting AMZN’s recent behaviour. In the lead up to earnings you have implied volatility that ramps up the front month options premiums, but time decay works against them. The skill is in identifying opportunities where you’re getting in cheaply in order to minimize the time decay risk.
