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.
What Can Happen At Expiration And What Action Should I Take?
- If Stock Closes At Or Below The Short Call Strike Price. Close The Spread (Possible Loss)
- If Stock Closes Above The Short Call Strike Price. Close Or Expire The Spread (Profit)
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.
What Can Happen At Expiration And What Action Should I Take?
- If Stock Closes At Or Above The Short Put Strike Price. Close The Spread (Possible Loss)
- If Stock Closes Below The Short Put Strike Price. Close Or Expire The Spread (Profit)
Earnings Trades For This Week
Earnings Trades, If any are posted during earnings season On Monday through Thursday around 3:00 PM Est
Results for this week’s trades will be posted over the weekend on the Scoreboard.
The information contained herein has been carefully compiled from sources believed to be reliable, but its accuracy is not guaranteed. Past performance is not necessarily indicative of future results. Traders should read The Option Disclosure Statement before trading options. No representation is made that any account is likely to achieve profits or losses similar to those shown. Due to the possibility of human and/or mechanical error by The Optionomics Group LLC, Inc., its sources or others does not guarantee the accuracy, completion or availability of any information contained herein and is not responsible for any errors or omissions or for results obtained from the use of such information.