In this post – options trading part 3 – we show how to make money with post-earnings. In the last part, we represented our statistics, now we look more at real trades examples.
1. Netflix (NFLX)
Netflix had earnings on 21. April after the close. The Earnings per share missed slightly, while revenues came in ahead of expectations. 15.7 million new lockdown subscribers in the quarter easily outperformed the 8.2 million expected. But the close to close reaction the day after was only -2,86%.
We bought a June Broken Wing Butterfly for 56$ Credit. With this construction, we don’t have any upside risk. If NFLX closed June above 370 we will get our credit. Below this, we have a chance for more. Far below the first standard deviation, we have some downside risks.
2. Texas Instruments (TXN)
Texas Instruments had earnings on 21. April after the close. TXN beats earnings and revenues. The close to close reaction the day after was +4,81%.
We bought a June symmetrical at the money 10 points wide Butterfly. With this Butterfly, we earn money if TXN stays in the range 105-115$. If the volatility goes down, which is usually the case, we have another edge.
3. AT&T (T)
AT&T had earnings on 21. April before Open. The company earnings per share were inline but the sales missed. The close to close reaction the day was -1,34%.
We sold a June 32 call slightly above the last local high for 73$. If AT&T will below 32 at the end we will get our credit. If the price breaks above 31.5$ we will close this short trade.
4. Intel (INTC)
Intel had earnings on 23. April after Close. The company earnings per share and sales beats expectations. The close to close reaction was only +0,37% because the outlook was negative.
We sold a June 65 call above the last local high for 93$. If Intel will below 65 at the end we will get our credit. If the price breaks above 62$ we will close this short trade.
5. Verizon (VZ)
Verizon had earnings on 24. April before the open. The company earnings per share beats expectations but the sales missed. The close to close reaction was +0,59%.
We bought an June Iron Condor for 347 credit. We will make money between 54 and 61$. Outside we have to close this income trade.
