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Option Strategies for Earnings Season

Buy a stock just before its earnings report is a bet: it can be highly profitable or devastating for your portfolio. You decide the risk you face. I always prefer to wait for the report, to compare their numbers with the estimates in EPS, sales, and guidance, review the conference call for some additional data and see the next day analyst's ratings, which usually increases or decreases their weighting and price target. And, of course, you can use specific options strategies during these events. Let's overview some ideas as to choose the right strategy. You need to know the following principles: -  A strategy that involves  long  options (been calls or puts) will typically  gain value as IV increases  and lose value quickly with IV decreases. - On the contrary, a strategy that involves  short  options (been calls or puts) will typically  gain value quickly with IV decreases  and lose value as IV increases. - During an earnings event,  the implied volatility IV of

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