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Author : Kaushik I. Amin
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.3/5 ( download)
Download or read book Option Trading and Earnings News Dissemination written by Kaushik I. Amin and published by . This book was released on 1993 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : kaushik i. amin and charles m.c. lee
Publisher :
ISBN 13 :
Total Pages : 34 pages
Book Rating : 4.L/5 ( download)
Download or read book option trading and earnings news dissemination written by kaushik i. amin and charles m.c. lee and published by . This book was released on 1993 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Kaushik I. Amin
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Option Trading, Price Discovery, and Earnings News Dissemination written by Kaushik I. Amin and published by . This book was released on 1998 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Option market activity increases by more than 10 percent in the four days before quarterly earnings announcements. We show that the direction of this pre-announcement trading foreshadows subsequent earnings news. Specifically, we find option traders initiate a greater proportion of long (short) positions immediately before good (bad) earnings news. Midquote returns to active-side option trades are positive during non-announcement periods, and are significantly higher immediately prior to earnings announcements. Bid-ask spreads for options widen during the announcement period, but traders do not gravitate toward high delta contracts. Collectively, the evidence shows option traders participate generally in price discovery (the incorporation of private information in price), and more specifically in the dissemination of earnings news.
Author : Charles M.C. Lee
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)
Download or read book Option Trading and Earnings News Dissemination written by Charles M.C. Lee and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Option market activity increases by more than 10% in the four days before quarterly earnings announcements. We show that the direction of this preannouncement trading foreshadows subsequent earnings news. Specifically, we find option traders initiate a greater proportion of long (short) positions immediately before good (bad) earnings news. Mid-quote returns to active-side option trades are positive during non-announcement periods, and are significantly higher immediately prior to earnings announcements. We conclude that option trading facilitates price discovery (the incorporation of information in price) for the underlying security, particularly during the dissemination of earnings news.
Author : Ping Zhou
Publisher : FT Press
ISBN 13 : 0132947404
Total Pages : 258 pages
Book Rating : 4.1/5 (329 download)
Download or read book Option Strategies for Earnings Announcements written by Ping Zhou and published by FT Press. This book was released on 2012-10-15 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt: By trading on corporate earnings, investors can reliably profit in both up and down markets, while avoiding market risk for nearly the entire quarter. In this book, two leading traders and portfolio managers present specific, actionable techniques anyone can use to capture these sizable profits. Ping Zhou and John Shon have performed an unprecedented empirical analysis of thousands of stocks, reviewing tens of millions of data points associated with option prices, earnings announcement returns, and fundamentals. Their massive analysis has identified consistent opportunities associated with focusing on the magnitude of the market’s reaction to earnings, not its direction. Option Trading Set-Ups for Corporate Earnings News offers concrete guidance for improving the likelihood of making correct forecasts, and managing the risks of incorrect forecasts. It introduces several ways to exploit option trading opportunities around earnings news, discuss crucial issues that most retail investors haven’t considered, and explore aspects of earnings-related option trading that have never been empirically examined and documented before. For example, they identify hidden patterns and potential opportunities based on valuation, industry, volatility, analyst forecasts, seasonality, and trades that immediately follow earnings announcements. Simply put, trading on earnings reports offers immense profit opportunities, if you know how. This book provides incontrovertible facts and detailed strategies, not just theories and anecdotes!
Author : John Shon
Publisher : FT Press
ISBN 13 : 0132615851
Total Pages : 225 pages
Book Rating : 4.1/5 (326 download)
Download or read book Trading on Corporate Earnings News written by John Shon and published by FT Press. This book was released on 2011-03-09 with total page 225 pages. Available in PDF, EPUB and Kindle. Book excerpt: Profit from earnings announcements, by taking targeted, short-term option positions explicitly timed to exploit them! Based on rigorous research and huge data sets, this book identifies the specific earnings-announcement trades most likely to yield profits, and teaches how to make these trades—in plain English, with real examples! Trading on Corporate Earnings News is the first practical, hands-on guide to profiting from earnings announcements. Writing for investors and traders at all experience levels, the authors show how to take targeted, short-term option positions that are explicitly timed to exploit the information in companies’ quarterly earnings announcements. They first present powerful findings of cutting-edge studies that have examined market reactions to quarterly earnings announcements, regularities of earnings surprises, and option trading around corporate events. Drawing on enormous data sets, they identify the types of earnings-announcement trades most likely to yield profits, based on the predictable impacts of variables such as firm size, visibility, past performance, analyst coverage, forecast dispersion, volatility, and the impact of restructurings and acquisitions. Next, they provide real examples of individual stocks–and, in some cases, conduct large sample tests–to guide investors in taking advantage of these documented regularities. Finally, they discuss crucial nuances and pitfalls that can powerfully impact performance.
Author : Monique W.M. Donders
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)
Download or read book Options and Earnings Announcements written by Monique W.M. Donders and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we study the impact of earnings announcements on trading volume, open interest and spreads in the stock option market. We find that option volume is higher around announcement days, even if we correct for stock volume and the expected future volatility of stock returns. Results in the pre-event period are different for good and bad news samples, indicating that option traders have access to (possibly short lived) private information. During the days before the announcements open interest tends to increase. After the earnings news dissemination traders seem to lose interest in the contracts and cancel part of their option positions thereby reducing open interest to normal levels. Analysis of quoted spreads provide no evidence of dealers' anticipation of higher information asymmetry in the pre- or post announcement period. However, results for effective spreads indicate that the transaction costs are higher on the announcement day itself and on the day immediately following the earnings dissemination. Both quoted and effective spreads are shown to respond to changes in trading volume and expected return variability.
Author : John Shon
Publisher : Pearson Education
ISBN 13 : 0132659751
Total Pages : 20 pages
Book Rating : 4.1/5 (326 download)
Download or read book Why Investors Should Trade Options Around Earnings Announcements written by John Shon and published by Pearson Education. This book was released on 2011-03-16 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Element is an excerpt from Trading on Corporate Earnings News: Profiting from Targeted, Short-Term Options Positions (9780137084920) by John Shon, Ph.D., and Ping Zhou, Ph.D. Available in print and digital formats. Two Line Description How to trade options before earning announcements — and profit whether the market raves or rages! Text Excerpt We’ve all seen perplexing market reactions to earnings announcements, but would you have guessed that this happens 40% of the time? Even if you predict the right direction of an earnings surprise, it’s still easy to lose money with a directional bet. So how can you profit from an earnings announcement? You use an options trading strategy called a “straddle.”
Author : Optioneering Ltd.
Publisher : Optioneering Ltd.
ISBN 13 : 131015967X
Total Pages : 139 pages
Book Rating : 4.3/5 (11 download)
Download or read book Optioneering - Make $1000's in Extra Income Every Month written by Optioneering Ltd. and published by Optioneering Ltd.. This book was released on 2015-03-30 with total page 139 pages. Available in PDF, EPUB and Kindle. Book excerpt: What is the Optioneering Strategy The Optioneering Strategy is an options trading strategy that was developed and perfected over the past 4 1/2 years. The options strategy finds its roots in market statistics and is designed to minimize risk. The fundamental difference between the Optioneering strategy and any other stock or options trading strategy available today is that the Optioneering Strategy is a "Reactive Strategy". Practically all stock picking and option trading strategies (books and websites) are focused on helping investors more accurately "predict" the direction of a stock or the underlying market. With the Optioneering Strategy you don't need to predict which way the market is going to go you just need to react to it. Trying to predict what a stock or the stock market will do tomorrow, next week or next hour is impossible for the average investor. The number of inputs that move the markets on a day to day, hour by hour, minute by minute time frame are impossible to comprehend. Earnings, politics, economic data, geopolitical news, weather, terrorism, commodities, interest rates, the Fed, etc all move the markets. How can anyone possibly predict where the market will go next week, next month or next year with all these variables? Well some people out there claim they can. The spectrum is broad form charlatans who operate websites making ridiculous claims to professional financial advisers. Lets reflect on this for a moment. If you am ill, you see your doctor, you expect with a high degree of confidence that he/she will come to a diagnosis that is accurate and prescribe the necessary medication to see that you get better. How can a financial adviser "diagnose" the markets, a disease with constantly changing symptoms. They may claim they can but I would bet statistically they are no better than flipping a coin. Safety First A key objective of the Optioneering Strategy is to minimize risk. A strategy whereby if a loss were to occur it would not wipe out months of profit or wipe us out completely like so many other option strategies. The basic strategy is founded on establishing setup positions each month that generate a profit consistently. The setups involve a combination of debit calendar spreads and reverse credit calendar spreads. There are 7 basic rules, 4 on setup and 3 for closing. If you follow the rules losses will remain small and profits will be maximized. A lot of other books on option strategies will tell you how the strategies work but they won't tell you how to consistently generate profits by applying them. They still require you to correctly "bet" on market direction. Applying standard option trading strategies in a predictive manner is no better than flipping a coin and runs the risk of generating large losses. Minimal Capital I started with $20,000, but one could easily get started with as little as $5000 to $10,000. The Optioneering Strategy is structured to minimized risk and margin. It is a brilliantly leveraged, yet a well hedged strategy that generates a profit 84% of the time. Over 4 1/2 years I grew $20,000 to over $200,000. During that period I placed 44 trade set ups of which 37 generated a profit and 7 resulted in a loss. The average or 37 monthly profits was $5,350 and the average of 7 monthly losses was $1950. Minimal Time Invested Other than making money saving time is the second best part of the strategy. Most days I spend 1 to 2 minutes a day just checking the market. Really just keeping an eye on it in the event I need to "react" to the market action. On my setup days it takes me about 10 minutes to get my order in and set. That's it! Minimal time invested. I don't need to know the news that drives the market and I don't really care. I only need to react to the market if it moves to prescribed limits we establish with each setup trade. "Getting time back is the best part of the Optioneering Strategy. I can focus on work and spend more time with my family" Less Stress and Anxiety With the Optioneering Strategy you place the exact same type of trades every month at the same time, regardless of what the market has done or is doing. There are a total of 7 rules to follow and they guide you on setting up the trade and exiting the trade. Investment stress and anxiety are rooted in trying to decide if you should buy, sell or hold your positions. With the Optioneering Strategy there is none of that as you have certainly in what to do when entering and exiting every trade. Getting Started Whether you are familiar with options or not the Optioneering Strategy is written with the novice in mind. Not only will it inform you of what you need to know but walks you through every trade placed over the past 4 1/2 years. Every trade contains a chart, historic options chain data and commentary on every trade. The Optioneering Strategy allows you to take control of your financial future. That's what I did and I'm now sharing this experience with you.
Author : Marco Klapper
Publisher : Anchor Academic Publishing (aap_verlag)
ISBN 13 : 3954891727
Total Pages : 73 pages
Book Rating : 4.9/5 (548 download)
Download or read book The Nature of Informed Option Trading: Evidence from the Takeover Market written by Marco Klapper and published by Anchor Academic Publishing (aap_verlag). This book was released on 2013-10 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the kind of information ‘informed’ traders have prior to a takeover announcement using options of target firms and elaborates on the cross-sectional relationship between options and stocks around takeover announcements. Financial markets are driven by information and by individuals that generate, process, and disclose this information to the market. Naturally, there have to be individuals who possess more information about a firm or a future event than other market participants. Mergers and acquisitions are particularly interesting events in this regard because they can have significant implications for the firms and stakeholders involved, as well as for the competitive dynamics in the respective market. Because of the large potential price impact of such transactions, traders with private information about a prospective takeover are expected to trade on this information to make a profit. But who are these ‘informed traders’ and what kind of information do they possess? This study tries to give a respond to this question.
Author : C. Jose Garcia
Publisher :
ISBN 13 :
Total Pages : 21 pages
Book Rating : 4.:/5 (13 download)
Download or read book Options and Accounting Information written by C. Jose Garcia and published by . This book was released on 2014 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the informational role of options trading in the price discovery process around the dissemination of accounting information, specifically annual and quarterly earnings announcements. Firstly, we examine the effect of options markets by analyzing stock market reaction to earnings news conditional on the availability of options markets. Secondly, we examine options-trading activity around the release of earnings news. Results show that when options trading is available, the options market enhances the price efficiency of equity markets. Moreover, the dissemination of earnings news is associated with significant unusual activity in the options market due to informed trading, especially when the earnings surprise is highly good.
Author : C. Jose Garcia
Publisher :
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (13 download)
Download or read book The Informational Role of Thin Options Markets written by C. Jose Garcia and published by . This book was released on 2017 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: English Abstract: This study investigates the informational role of thin options markets, specifically the Spanish options market. Firstly, we examine the effect of options markets by analysing stock market reaction to earnings news, conditional on the availability of options markets. Secondly, we examine options trading activity before the release of earnings news (including the announcement period). The results show that the impact on prices before the earnings release is significantly bigger when options trading is available. Moreover, the dissemination of earnings news is associated with significant unusual activity in the options market due to informed trading, especially when the earnings surprise is highly good.Spanish Abstract: El trabajo analiza el papel informativo de los mercados de opciones para el caso de escasa negociación, centrándose en el mercado español. Estudiamos el efecto de la llegada de nueva información relevante, como es el anuncio de beneficios, en el mercado de contado bajo la presencia de opciones sobre dichas acciones. Además, examinamos la actividad negociadora en el Mercado de opciones ante dicho suceso. Los resultados muestran que el impacto de la información es superior cuando existen opciones cotizadas sobre dichas acciones. Adicionalmente, se observa una actividad negociadora anormal en el mercado de opciones debido a la negociación informada, principalmente cuando la noticia es muy buena.
Author : Sunyoung Kim
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Effect of Option Listing on Price Reactions to Earnings Announcements written by Sunyoung Kim and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the effect of option listing on the stock-price response to quarterly earnings announcements. We find that option trading reduces the magnitude of the pre-earnings announcement drift. We also present evidence that firms with options exhibit more intensive price reactions to earnings news than firms without options. In addition, we show that the magnitude of the post-earnings announcement drift is smaller for option firms than non-option firms. These results suggest that the existence of traded options increases the speed of stock price adjustment. Overall, our results reinforce the notion that option listing improves the informational efficiency in equity markets. In addition, our results are consistent with the view that transactions costs cause a delayed price response in the post-earnings announcement period.
Author : Marco Klapper
Publisher : Anchor Academic Publishing (aap_verlag)
ISBN 13 : 3954896729
Total Pages : 70 pages
Book Rating : 4.9/5 (548 download)
Download or read book The nature of informed option trading: Evidence from the takeover market written by Marco Klapper and published by Anchor Academic Publishing (aap_verlag). This book was released on 2014-02-01 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the kind of information ‘informed’ traders have prior to a takeover announcement using options of target firms and elaborates on the cross-sectional relationship between options and stocks around takeover announcements. Financial markets are driven by information and by individuals that generate, process, and disclose this information to the market. Naturally, there have to be individuals who possess more information about a firm or a future event than other market participants. Mergers and acquisitions are particularly interesting events in this regard because they can have significant implications for the firms and stakeholders involved, as well as for the competitive dynamics in the respective market. Because of the large potential price impact of such transactions, traders with private information about a prospective takeover are expected to trade on this information to make a profit. But who are these ‘informed traders’ and what kind of information do they possess? This study tries to give a respond to this question.
Author : Lee Finberg
Publisher :
ISBN 13 : 9780615536910
Total Pages : 82 pages
Book Rating : 4.5/5 (369 download)
Download or read book The Monthly Income Machine written by Lee Finberg and published by . This book was released on 2010-07-13 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Monthly Income Machine is NOT just another book that simply defines option terms, strategies, and when you might use various speculative approaches.It reveals instead a specific, detailed list of exact entry and trade management rules for the conservative investor seeking reliable monthly income... up to 8-10% per MONTH Return on Investment (ROI).The technique it offers is suitable for regular accounts, retirement accounts and any investor wanting to consistently seek profit from the markets with minimum and controllable risk.When the reader finishes this readable step-by-step guide to risk-adverse income investing, he will see why the principle it is built on is the way many pro's invest.
Author : Mark Sebastian
Publisher : Walter de Gruyter GmbH & Co KG
ISBN 13 : 1501505572
Total Pages : 209 pages
Book Rating : 4.5/5 (15 download)
Download or read book Trading Options for Edge written by Mark Sebastian and published by Walter de Gruyter GmbH & Co KG. This book was released on 2017-11-20 with total page 209 pages. Available in PDF, EPUB and Kindle. Book excerpt: If you have experience in option trading, or a strong understanding of the options markets, but want to better understand how to trade given certain market conditions, this is the book for you. Many people have some knowledge of trading strategies, but have no idea how to pull it all together. Mark Sebastian’s latest book will teach trade evaluation, using Greeks, trading various spreads under different market conditions, portfolio-building, and risk management. Sebastian’s approach will help traders understand how to find edge, what kind of trade under what conditions will capture edge, and how to create and successfully hedge to help you build your own personal Goldman Sachs or Merrill Lynch. The book demonstrates how to structure a portfolio of trades that makes more money with less risk. Click here to watch the author's interviews with Fox Business and Nasdaq: http://video.foxbusiness.com/v/5759956686001/ https://youtu.be/dOEJ118vMnA
Author : Bernard Dumas
Publisher :
ISBN 13 :
Total Pages : 34 pages
Book Rating : 4.:/5 (258 download)
Download or read book Implied Volatility Functions written by Bernard Dumas and published by . This book was released on 1996 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: Black and Scholes (1973) implied volatilities tend to be systematically related to the option's exercise price and time to expiration. Derman and Kani (1994), Dupire (1994), and Rubinstein (1994) attribute this behavior to the fact that the Black-Scholes constant volatility assumption is violated in practice. These authors hypothesize that the volatility of the underlying asset's return is a deterministic function of the asset price and time and develop the deterministic volatility function (DVF) option valuation model, which has the potential of fitting the observed cross-section of option prices exactly. Using a sample of S & P 500 index options during the period June 1988 through December 1993, we evaluate the economic significance of the implied deterministic volatility function by examining the predictive and hedging performance of the DV option valuation model. We find that its performance is worse than that of an ad hoc Black-Scholes model with variable implied volatilities.
