There are two Trade Ahead Of Earnings Strategy setups for today, Tue Mar 17 2020. 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 but often in bear markets, it earns considerably more. The second trade I believe will fall lower on Tuesday after earnings are announced.
Stock: General Mills Stock (GIS)
Earnings Announced: Wed Mar 18 2020 Before Markets Open
Number of contracts: 4
Expiry: Apr 17 2020
Method: reverse iron condor
This trade has to be setup no later than Tue Mar 17 2020 by 4:00 PM
Setup Comments:
I am using just 4 spreads on each side of this trade but I am expecting the stock to fall lower after earnings are released on Tuesday before the open.
Put Side:
Bought 4 put contracts of the Apr 17 2020 expiry $60.00 put strike for $4.65 = ($1,860.00)
Sold 4 put contracts of the Apr 17 2020 expiry $55.00 put strike for $2.725 (average) = $1,090.00
Cost is $1.93 X 4 = ($770.00)
Put Spread Size = $5.00
Call Side:
Bought 4 call contracts of the Apr 17 2020 expiry $60.00 call strike for $2.79 = ($1,116.00)
Sold 4 call contracts of the Apr 17 2020 expiry $65.00 call strike for $1.30 = $520.00
Cost is $1.49 X 4 = ($596.00)
Call Spread Size = $5.00
Trade Summary:
1) Commission 16 X $0.25 = $4.00
2) Total Capital At Risk = ($1,370.00)
Comments:
This trade could return 50% or more if the stock moves to or beyond the short put or short call before the expiry date.
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.
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.