Uber is a no stranger company for many of us before its IPO on May 10 2019. The first day volume was 186 millions share but lowest around 11 millions in the month of May 2019. UBER was going to report its first earning results since IPO on May 30th after market closed.

There was no prior earning data and we were unable to know how market going to react after earnings. There was no IVR (or IV Percentile in ThinkorSwim) data available for us to make decision. The IVR script I set earlier needs one year data on IV to plot first IVR data point. Since UBER was an IPO, there was no IVR data.

The stock price was stable around USD39 to USD42 two weeks before earnings. When looking at options chain, the option premium was high. So there was an opportunity to set wide strike prices using strangle for earnings play on UBER. 

A strangle is an options strategy involves a put at a strike price Kp and a call at a strike price Kc, where Kp < S < Kc and S is the stock price.

Both put and call options are at the same expiration.A strangle is an options strategy involves a put at a strike price Kp and a call at a strike price Kc, where Kp < S < Kc and S is the stock price. Both put and call options are at the same expiration. 

One of my trades is earnings play using Short Strangle strategy with IV Rank.

During the earnings reporting season, there are always uncertainty to the stocks that going to announce their results. Regardless the earnings results - within expectations or surprises - the implied volatility and IVR most likely will go up each day due to uncertainty right before the announcement. What we can do is to

1) scan stocks with high IVR one trading day before the earnings announcement. I usually look for the stock with IVR 70 or above.

2) ensure the IVR crushed dramatically right after announcement in the last few quarters.

3) only select stock with high liquidity.

4) no dividend or the dividend will be given around 20 days or more after earnings so that I have enough time to BTC (buy to close) the strangle.

5) check the historical gap up /  gap down. Then setup the width of strangle wide enough to avoid potentially tested and try to get at least USD100 premium from this strategy.

6) close the position right after announcement when IVR crushing down. Ideally getting 30 to 50% from max profit.