OptionsHouse Promotion Code


Current 2016 OptionsHouse promotion code: 60 days of free trading. Best OptionsHouse promotions for opening new account or for existing customers depositing cash into regular brokerage account, ROTH IRA, or 401K rollover IRA.


OptionsHouse Promotion Code


Trade Free For 60 Days when you Open a New OptionsHouse Account.


OptionsHouse Promotion Code Details


This is a special, limited-time offer valid for new customers who open and fund an account with a minimum of $5,000 within 30 days of account opening. New accounts receive 100 commission-free trades for stock or options executed within 60 days of funding the new accounts. You will not receive cash compensation for any unused trade commissions. Offer is not transferable and is not valid with internal transfers. You must apply for the offer by inputting promotion code 60FREE when opening the account. This promotion may not be combined with other offers. Offer does not apply to listed and OTC equities priced at less than $1.00 per share. OptionsHouse will add $0.0005 per share on the entire order for any stocks priced less than $1.00. After the promotional period ends, OptionsHouse’s standard pricing will apply. Contract, exercise, assignment, execution, exchange and other fees may be excluded from the commission-free offer and additional charges may apply. OptionsHouse reserves the right to restrict, revoke, or terminate this offer at any time. This is not an offer or solicitation in any jurisdiction where OptionsHouse is not authorized to do business. Other terms, conditions, and restrictions may apply.

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How to Trade Options Before Earnings or News Release


Like a sexy gal that can cook or an inside source at the racetrack, an actionable option strategy prior to an earnings release is something that traders know must be out there, yet it remains elusive. Most investors looking to capitalize on an earnings beat or miss simply buy calls or puts. Some of the more sophisticated speculators even get long both a call and a put (straddle/strangle), thinking that if the stock moves enough one way or the other, they'll come out at least a little bit ahead.


Limited Risk – High Reward


The allure of only being long calls and/or puts is that a trader knows their maximum risk as soon as they enter the order. If a call on Apple costs $100, then $100 is the most you can lose, plus you have the chance to "rake it in" if Apple moves significantly before the option expires.

Therein lies the trouble with most long-side option strategies prior to earnings announcements...since no one knows what the earnings report will hold, or how the underlying stock will react; the demand for options goes up markedly before the announcement. Both speculators and shareholders looking to insure against volatility are clamoring for options which dramatically increases the premiums, making puts and calls overpriced.


Being the Bookie


Everyone knows that taking bets is more profitable long-term than making bets. Especially if the wager has very favorable odds for the house. This is exactly what overpriced options are for the seller – a game that stacks the deck against the buyer. In general, immediately after earnings are released, the demand for - as well as the volatility premium built into - calls and puts, evaporates. Even those that theoretically have both upside and downside covered find it difficult to profit once that "premium of the unknown" is gone from their asset.

So the obvious solution would appear to be: become a seller of options. If only it were that easy! Unless you have the bottomless pockets of a Goldman Sachs, the unlimited risk part of being a naked option seller will be too much for you and your broker's heart to take.


Credit Spreads


In order to take advantage of the inflated premiums in the option market prior to an earnings announcement, yet mitigate the risk of selling uncovered (naked) puts/calls, the go to strategies are "bull put credit" and "bear call credit" spreads.

Rather than getting bogged down in the stock XYZ trading at $50 - type explanation, I'll leave it to a google search for those wanting the nuts and bolts of how to construct the option spreads mentioned above. The focus here is how to maximize the profit from these spreads and that is accomplished in the unwinding.


Unwound


Once the earnings report comes out and the market is digesting and reacting to the numbers, option prices revert to a more realistic reflection of future prospects. This allows the options trader to unwind his pre-earnings position and cash in on the uncertainty that was prevelant prior to the announcement. Does it work every time? No. Does it provide enough profit to get an address on easy street if it's all a trader does? No. But it works often enough and provides a boost to the bottom line to make it a worthwhile play to investigate further.



Updated on 11/1/2016.


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