By Investment U Research Team Day trading is a constant struggle to maximize gains and minimize losses. This results in maneuvers like earnings strangles. An earnings strangle is an attempt to capitalize on a company’s upcoming earnings report with a strategy that will profit from the stock’s expected movement—whether up or down.
The maneuver consists of setting both calls and puts on the same company with the same expiration date—usually the day or two after the earnings report. The strangle comes from the different prices of the puts and calls. An “out-of-the-money” call paired with an “out-of-the-money” put caps unrealized losses and lays down a …read more
