Inseego Corp (INSG)

[jessellivermore]

Here's What you need to consider vs puts....

Check out the term ..Volatility Skew...

The idea is that one thing that effects the price of option, besides strike, price an X-date is volatility... That is not only volatility related to the VIX, but volatility related to the binary event. Both increase the price of options...And a situation that comes up frequently in these situations such as earnings or drug trial results, is the volatility prior to the event is very high leading into the event. But the volatility collapses once the event results are known..So this results in a "Volatility Skew" because the option's price drop dramatically once the event is announced..The upshot is your profits can drop to the point where they not worth anywhere near what you expect...The effect i mainly seen in puts which are out of the money...

The INSG situation is tricky here...First we re already down three points on the PPS and we are getting mixed vibes on the earnings..Half the analysts say we re going to beat the estimates and half say we are not going to beat the estimates...The best hedge here is probably serlling covered out of the money calls..The idea here is you are selling volatility and if you sell prior to the earnings call..The price of the calls you sold are going to drop and you can buy them back cheap..

":>) JL