Earnings season is a great time for a skip strike butterfly. Today’s example: AMZN.
Download Options Playbook Radio 181: AMZN Skip Strike Butterfly into Earnings
This is probably the biggest week of earnings reportings, when the most vaulable stocks report. There are things to take into account because of earnings:
- Remember that implied volatilities rise around earnings
- Why a skip strike butterfly?
- Setting up the trade to pay for itself
- Where is AMZN trading right now?
- What is the long straddle aka the expected move
- Using the long straddle to select strikes
- Earnings-related risks
- What is the expected move?
- Setting up the trade
- What is the upside? Downside?
- Nuances of options pricing
- Remember time premium