Experiment to explain regards to stop losing money on earning bets using weeklies
u/Impressive_Towel7321 ·
Reddit — r/wallstreetbets
· May 26, 2026 at 03:03
· ⬆ 23 pts
· 💬 9 comments
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AI Summary
Summary
The post details an experiment using straddle options (long call + long put at same strike) before earnings on Meta, MSFT, GOOG, and Roku to demonstrate that inflated IV and required moves make profitable earnings bets extremely unlikely.
The author’s thesis is that buying weekly options before earnings is a losing strategy because the stock must move more than the implied move to overcome IV crush and theta decay — akin to worse than a coin flip.
Quality assessment: Moderate — the reasoning is logical and references Black-Scholes, but it’s a single-person anecdotal experiment with no backtest or statistical rigor; borderline noise as a general cautionary tale.
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Saw so many regards here going full ports on weekly to 0dte calls and puts right before the earnings
As much as I have learned following Buffet and some bookworm shit I learned from my 2 levels of my CFA, theres no way anyone makes money from the IV thats jacked up high tits
My thesis was that I would enter long call and long put at the same strike price and with the same expiry thats set to expire post earnings and I entered these contracts just a day before the earnings and exited post earnings
As per understanding, chances of making money on earnings bet using options is even worse then getting heads when a coin flip because the stock just doesnt need to go up, it needs to pass the threshold because the weekly option prices pre earnings are so jacked up because of you regards trying to get rich by playing dumb games
So getting back to it, I went long call and long put on Meta, Msft, Goog and Roku
Going long call and long put both with same strike and same expiry is called straddle
As per Black Scholes, Meta needed to move +/-5.7% for my straddle strategy to make any money post IV crush and after a day of theta loss. Similarly, msft had to move +/- 6.2%, goog +/-7.1%, and roku +/-14.3%
If you think about it rationally, theres no way freakin MSFT would move +6% during earnings
And the reason for saying that your chances of winning are less then a coin flip because with Roku, long call and long put both lost money so regardless of you picking black or red, you still lose
Made money on goog and meta, and lost on Msft and lost terribly on roku but made breakeven with all 4
So the conclusion here is before making earnings bets on any stock, provide all the greeks for the option youre looking for and ask claude how much the stock should move for your option per black scholes to make money if the option is sold post earnings, and if you think its gonna happen, go for it, all power to you my fellow regards
TL;DR generated by AI because why not
Most regards lose money on earnings options because IV is insanely inflated pre-earnings. The stock doesn’t just need to move up/down — it needs to move MORE than the implied move priced into the options.
Before gambling earnings, calculate the implied move and breakeven instead of blindly buying weeklies like a degenerate.