Anticipating Events
It is important to keep abreast of any upcoming events that concern the stock associated with your option trade. Any event that might have a significant influence on the stock price has the potential to produce a huge change in the price of a related option.
Of course, some events cannot be anticipated, but there are many that can be. Perhaps the most important event for any stock is the quarterly earnings report. Also, dates for stock splits and dividends are important. These dates are known well in advance and can be easily found on free Web sites (for example, Yahoo! Financial). Less-common events such as a drug approval or a court decision may not have a specifically announced date, but the likely time may be known within ...
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