INTC and MSFT Earnings Anticipation
MSFT and INTC is going to release their quarterly earnings announcements on October 26th and 17th respectively. I have anticipated this by taking a straddle options position (meaning that I have a buy call and buy put contracts). This is done to limit my risk exposure (and thus, also hurting my profit position). Anyway, here’s the position (I entered on October 9th) :
- Straddle on MSFT with at-the-money strike price of $27.5 with the expiration date in November
- Straddle on INTC with at-the-money strike price of $20 with the expiration date in November
As I’ve said earlier, this type of strategy (straddle) can limit your risk exposure but also limiting your upside potential. It’s safe to choose this strategy only and only if you don’t know how well their earnings potential will be (I’m not following these two companies closely, so I don’t know for sure). Plus, if you are on a straddle, be sure that the security volatility is as high as it can be (straddle correlates positively with volatility) — and earnings is a very good opportunity of high volatility.
On the contrary, if you are sure where the market will go, just go with naked buy call or puts ;)
