Quick Take: Bullish – Earnings Trade
Time Frame: Three To Ten Days.
Underlying Stock: Bullish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Up.
Option Position: Short Expiring ATM +2 Call – Long Deferred ATM Call (Credit Spread).
Maximum Risk: Initial Call Spread Debit.
Summary: The stock performs as anticipated. The short expiring ATM +2 call expires worthless and the long ITM deferred call gains additional premium.
Quick Take: Bearish– Earnings Trade
Time Frame: Three To Ten Days.
Underlying Stock: Bearish Market Edge Opinion – No Stock Position.
Desired Stock Price Direction: Down.
Option Position: Short Expiring ATM -2 Put – Long Deferred ATM Put (Credit Spread).
Maximum Risk: Initial Put Spread Debit.
Summary: The stock performs as anticipated. The short expiring ATM -2 put expires worthless and the long ITM deferred put gains additional premium.
This Week’s Earnings Trades
| Start | Stop | |||||||||
| Directional Horizontal Earnings Trades | ||||||||||
| Bullish | Market | Open | Earnings | Short One | Long One | |||||
| Open | Edge | Stock | Release | Report | 04/19/19 | 04/26/19 | Open | 100% | Max | |
| Stock | Date | Opinion | Price | B-A Market | Date | ATM +2 Call | ITM Call | Debit | Target | Risk |
| BA | 04/23/19 | Bullish | $373.90 | Before | 04/24/19 | 377.5 | 372.5 | $4.20 | $8.40 | $4.20 |
| Bearish | Market | Open | Earnings | Short One | Long One | |||||
| Open | Edge | Stock | Release | Report | 04/26/19 | 05/03/19 | Open | 100% | Max | |
| Stock | Date | Opinion | Price | B-A Market | Date | ATM -2 Put | ITM Put | Debit | Target | Risk |
| UNH | 04/22/19 | Bearish | $226.29 | Before | 04/23/19 | 222.5 | 227.5 | $3.42 | $6.84 | $3.42 |
Results for this week’s trades will be posted over the weekend on the Scoreboard.