Options Drills: How to play earnings through options plays. There are two basic approaches to earnings trading: long premium and short premium.

• Long Premium - PROS: Advantageous because you essentially receive free or dramatically reduced gamma with little decay in the weeks leading up to earnings. CONS: All of that decay comes out, and more, after the announcement. Also, much of the movement in the underlying occurs after-hours and is unavailable to options traders.
• Short Premium - PROS: Higher probability of success, need a substantial move post-earnings to lose money. CONS: Doesn't collect decay until earnings event, potentially losses can be catastrophic can make it hard to sleep at night.
• How to analyze Greeks during earnings week.
• Different strategies to employ during earnings: Calendars, Straddles, Strangles & Butterflies

Mail Call: Our drill Sergeants show their softer side.

• Question from Stock Doctor: Why can't I trade options after hours? I'm missing most of the stock movement if I wait until the next open.
• Question from Timothy Stephens, Tulsa, OK: If I buy a 3-month ATM calendar spread prior to earnings, am I correct in saying that I'm net long vega and short gamma? If so, what type of earnings announcement would benefit me the most - an as-expected announcement where the stock stays at the ATM strike for my short gamma or a wildly unexpected announcement where the stock moves dramatically for my long vega? Which risk metric is king in the time spread equation - gamma or vega? Thank you very much for you insight and for producing this informative program.
• Question from Rich T: Does Sogo offer reduced commissions to close out short options trading for a nickel or less?