From Theory To Practice

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7/16/20: Portfolio Analysis - Earnings Winners When Stock Moves Against You

From Theory To Practice

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

In today’s portfolio analysis, we start by looking at our two earnings trades: IBM and BAC. Interestingly, it turns out that IBM doesn’t report earnings until next week, but we luckily stumbled into a nice winner on this position anyway. Then, even though BAC fell after its earnings call, our Short Put is still profitable. This example perfectly illustrates the power of selling out-of-the-money options.

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