Scott,
Bloomberg Markets
1h
A popular volatility trade on Wall Street is netting historic gains as the likes of Facebook parent Meta and Spotify misfire this earnings season
Goldman Sachs Touts Volatility Trade Netting 15% on Wild Earnings Days
- Straddle owners reap profits amid outsize stock reactions
- Facebook, Spotify shares tumble after disappointing results
A popular volatility trade on Wall Street is netting historic gains as the likes of Facebook parent Meta Platforms Inc. and Spotify Technology SA misfire this earnings season.
Known as the straddle investing style, managers buy a bullish and a bearish options contract in a company five days before it reports – and then sell both a day after the event. If shares move far enough in either direction to boost the price of either the put or the call, the strategy makes money.
Regards
James