Before quarterly results, option premiums on a stock rise because traders expect a big move. The Results moves page shows how big that expected move is, and afterwards, how big the move really was.
Results coming up
- Options price in: the at-the-money straddle as a % of the share price, the move (up or down) the options expect by their expiry.
- Usual results move: how much the stock moved, on average, on its past results days.
- Compared: Priced above usual means options expect a bigger move than the stock usually makes on results (premiums are rich); Priced below usual means the opposite.
Recent results
- Options priced in: the straddle at the close before the results, as a % of the price.
- Actual move: the stock's move on the reaction day: the same day if results came out during market hours, the next trading day if they came after the close.
- Result: Smaller than priced or Bigger than priced.
- Straddle that day: how much the straddle fell once the news was out. This drop is called the volatility crush.
How traders use it
If a stock usually moves less than its options price in, selling options before results has tended to pay, though one surprise can wipe out several wins. If it often moves more, buying options has had the edge. Always look at several past results, not one, and remember that the straddle's expiry may be days after the results.