The Wall Street Journal: A Weekly Gamble for Options Traders
Wed January 15, 2014
"[We] focus much more on earnings date precision than we had in the past. There is a big risk-reward to getting the date right."
-- senior trader at Timber Hill, the market-making unit of Interactive Brokers Group Inc.
Google, insurer Aetna Inc. and financial-services firm Northern Trust Corp. are among other companies that have recently announced earnings dates that were off from what options traders had been betting, market participants said. The impact of earnings dates on weekly options feeds through to their price through something known as implied volatility, the estimated measure of the magnitude of future stock-price swings.
"It's actually a pretty regular occurrence, but it's not always as pronounced as the Apple example," said Barry Star, managing director at Wall Street Horizon, a company that specializes in providing dates for corporate events such as earnings releases.