Options Traders Reap Massive Gains From Earnings Season Volatility
Options strategies betting on stock swings saw 45% returns this month. Low volatility made trades cheaper as firms like Microsoft reported major price moves.
Insights:
Options straddles on companies in the US 
US reporting financial results have yielded an average return of 45% over the last four weeks, according to data provided by ORATS. This performance represents a significant spike compared to the historical average of 2% recorded over the last 12 quarters. The trend, noted by Matt Amberson, indicates that unusually large post-earnings stock moves have made the strategy of buying straddles notably profitable, subsequently affecting volatility dynamics and trading outcomes across the equity options markets.
US reporting financial results have yielded an average return of 45% over the last four weeks, according to data provided by ORATS. This performance represents a significant spike compared to the historical average of 2% recorded over the last 12 quarters. The trend, noted by Matt Amberson, indicates that unusually large post-earnings stock moves have made the strategy of buying straddles notably profitable, subsequently affecting volatility dynamics and trading outcomes across the equity options markets.The current earnings season has been characterized by sharp price fluctuations in several high-profile stocks. Market participants observed significant price action in large-cap entities such as Microsoft Corporation and Meta Platforms, Inc. following their respective reports. These movements have contributed to a shift in how traders approach earnings-related volatility, as realized moves have frequently exceeded the expectations implied by options pricing.
