COG Channel Squeeze is simply when you see a number of the blue crosses lining up.
I was able to make more than a 6,000% return on my put options, because the squeeze was leading up to date.
More Examples Below. *Check out YUM for a possible play a week or two before 2nd Quarter July 16, 2014.
As far as the researching expected events it's really easy. Look up future earnings dates. You can use TradingView to look up to next 7 days. You can also use Yahoo Earnings Calendar for any future current quarterly earnings.
As far as the chart... really simple Hamed. COG Channel Squeeze is what you would look at. IF you see blue crosses you have a high degree of expected future volatility in the near term. IF your referring with the chart just above, that's a bit more complex. I would keep it simple for now and look for COG Channel Squeeze.
interesting idea! So far I have been hearing only about selling pre-earnings volatility … not buying it. However, would you please share some more info on this technique you apply?
Before earnings, you buy puts and calls deep OTM, expecting to profit from big changes in prices after earning releases. But I understand that before earnings volatility increases, whereas just after earning releases it drops dramatically. How do you avoid buying just short term volatility? I would think market makers do know well how to price it to their advantage, so how long before earnings (few weeks? several months?) do you purchase these deep OTM options?
How far OTM are the strikes you select? what delta do you choose? or what other criteria do you use to determine their optimal strikes?
Do you select only those stocks which historically demonstrated higher than avg price swings just after earnings? or those stocks with highest earnings surprise rates? how and where do you search for these candidate stocks?
Any numerical example you can post here among the 6000% trades you mention?
Thanks. Best. GT
1.) Hunt for Volatility using measures such as COG Channel and Squeeze Momentum Indicator.
2.) Look for possible targets by trendlines or Fibonacci support resistance. You can also consider price targets from chart patterns, such as cups or V patterns. Also think about how long it might take to hit this target.
3.) Give yourself time for your target to hit. Always go over by next OTM strike price from your target, unless you give your self more time (less risk) than bump your OTM strike to next level to gain more profits.
4.) If your option is in-the-money and your stocks momentum is still moving in the direction you wanted, roll the option and MAKE MORE MONEY until momentum shifts.
Now back to step 1, this should take up 70% of your time. Looking for Chart Patterns or trendlines should makes up 25% of your time. Picking options shouldn't take much more than a few mins. Checking in on your trade one-two times a day after you've made one should only take a few mins. If you're playing more than one option at once, your probably GAMBLING, not investing.
anyway, right now there is FDX which is almost double topping with a clear negative divergence compared to the TRIX indicator.
I have the (only gambling, unfortunately) impression that FDX could be a good candidate for a retracement in the next days after earning releases in the coming hours.
Is this a play you would consider interesting? and if so how would you play it with deep OTM put options? or do you think it could work out better with an OTM put bearish calendar spread?
Thank you very much, Best, bye.