Hey guys, I had a quick question and was hoping to get your thoughts on a hypothetical trade scenario. Let's say a Stock is currently trading at $30 and has an upcoming earnings scheduled. You think the stock is going to tank, so you decide to short it but you want to hedge against your position by buying a Call.
Now, Call Options are trading at a premium due to IV. Would it be best to wait until after earnings to purchase the Call or buy it now and hope the Stock falls beyond the Shorted Price + Option Price?
I'm guessing that even if the Stock reports good earnings and goes up 10%; I can still purchase an ITM Call at a lower cost.
Leave a Reply