There are a large number of stocks that are being setup today, Wed Oct 21 2020 using the Trade Ahead Of Earnings Strategy.
Chipotle Mexican Grill Stock (CMG) and Lam Research Corp Stock (LRCX) have had no fills and are being dropped from today’s list. Union Pacific Stock (UNP) had high prices that made it difficult to put together a reasonably priced trade. As such it was also dropped.
Remember that this strategy can bring in big profits especially in the environment we find ourselves in at present. It does not matter whether it is a bull or bear market, it is the movement of the stock that creates the profit whether it moves up or down in the weeks after earnings are released.
Stock: Las Vegas Sands Stock (LVS)
Setup Info:
This trade has to be setup no later than Wed Oct 21 2020 by 4:00 PM
Earnings Announced: Wed Oct 21 2020 After Markets Close
Number of contracts: 4
Expiry: Nov 20 2020
Method: reverse iron condor
Setup Comments:
I am using $5 spreads on both sides of this trade.
Put Side:
Bought 4 put contracts of the Nov 20 2020 expiry $45.00 put strike for $2.49 = ($996.00)
Sold 4 put contracts of the Nov 20 2020 expiry $40.00 put strike for $0.86 = $344.00
Cost is $1.63 X 4 = ($652.00)
Put Spread Size = $5.00
Call Side:
Bought 4 call contracts of the Nov 20 2020 expiry $45.00 call strike for $3.55 = ($1,420.00)
Sold 4 call contracts of the Nov 20 2020 expiry $50.00 call strike for $1.67 = $668.00
Cost is $1.88 X 4 = ($752.00)
Call Spread Size = $5.00
Trade Summary:
1) Commission 16 X $0.25 = $4.00
2) Total Capital At Risk = ($1,408.00)
Trade Goals:
This trade could return 50% or more if the stock moves to or beyond the short put or short call before the expiry date.
The net income goal for this trade is potentially: $700.00
Don’t Forget
Don’t forget there are strategy articles and sample trades listed below each of the trade articles using this strategy. Scroll down to the bottom of the page to see them. Remember to paper trade this strategy until consistent winning results are achieved. Don’t risk capital in a strategy without proven results. Paper trading can teach investors how to apply a strategy and whether it will work for them or not. Not every strategy works for every investor. Everyone has their own comfort level and ability. Stay with those strategies that provide consistent winning trades.
Learning The Trade Ahead Of Earnings Strategy
For investors learning the Trade Ahead Of Earnings Strategy, one of the best ways to learn is through actual trades, from start to finish.
Outcomes of Trade Ahead Of Earnings Strategy Trades
Here are trade articles that are well worth reading to learn more on the Trade Ahead Of Earnings Strategy including how to setup trades, manage and adjust them and close them for profits. Make sure to paper trade any strategy until there are consistent profits.
Using The Trade Ahead Of Earnings Strategy With Smaller Portfolios: Aug 31 2017
Under Armour Stock: Aug 7 2017 / Strangle
Amazon Stock: July 28 2017 / reverse iron condor
PepsiCo Stock: July 25 2017 / reverse iron condor
Alphabet Stock: July 25 2017 / reverse iron condor
Netflix Stock: July 18 2017 / modified reverse iron condor – full strategy explanation
Netflix Stock: July 17 2017 / handling the modified reverse iron condor
Delta Stock: July 13 2017 / the day after earnings – reverse iron condor
How To Pick Option Strikes May 16 2017
American Airlines Stock Returned 87% – Here’s How – April 27 2017 / reverse iron condor
Lulu Stock: March 30 2017 – reverse iron condor Handling The Trade Strategy The Day After
Yum Stock: Feb 4 2016: handling a loss when using reverse iron condor trade ahead of earnings
Monster Beverage Stock: May 1 2016: 104% Return – Handling The Trade After Earnings Are Announced
Twitter Stock: May 1 2016: reverse iron condor – calls ended up worthless – 26% returned
Apple Stock: Jan 30 2016: improving on a reverse iron condor trade – 81% return
Questions? Use the form below or Ask Teddi.
Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. You always trade at your own risk. Read the full disclaimer.