This transcript comes an interview with John Shon that you can find here. You can also find our archives of interviews with some of the world’s best investors here.
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One thing I’ve found in my individual investing practice, both my own investing and the work I do with clients, is that, although I know basic options strategies, I’ve struggled to really implement them. More than anything, I feel that options are a great way for a lot of investors to lower the risk in terms of playing out a thesis that they have on a particular stock.
The hardest thing to do with options is to pick a direction, and this is what many investors do, is to buy a call or buy a put, and basically say, “I’m making a bet that the stock’s going to go up or down.” It’s (a) very hard to pick which direction, and (b) a lot of times even if we’re right, meaning earnings season is particularly good, there’s some good news out, the stock may not react the way we’re predicting it.
I was really interested to read this book that was put out recently on the FT Press by John Shon, who’s a professor of accounting at Fordham. He has a Ph.D. from University of Chicago at Booth School. He wrote a book along with Ping Zhou called “Trading on Corporate Earnings News: Profiting from Targeted Short-Term Options Positions.” I invited John on to the show today to discuss the book. Continue reading “The Best Way to Play Earnings with Options — with John Shon (transcript)”