Published Sep 2, 2026, 1:38 PM ET · Updated 2 months ago · 1 source

Proprietary trading desks exploit high implied volatility in short-term options during earnings events

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Proprietary trading desks utilize options, specifically calendar spreads, to exploit the high implied volatility in two-day premiums relative to longer-dated options during earnings events for stocks like AVGO, DELL, and SNOW. The introduction of zero DTEs has significantly opened up new trade ideas for this approach, allowing traders to capture premium quickly and reduce cost basis.