- Report after the close ~4:05pm
- Expected move for this Friday +/-11.5%
- Last earnings the stock closed higher by +26.0% the following trading day, basically at its high of the day.
- Recent earnings moves (from most recent to oldest), +26%, -16%, -22%, -12% and +40%. Needless to say a stock that moves quite a bit historical on its report.
Expected move chart for this Friday: 11.5%, which is s significant chunk of the 17% or so expected over the next month. From Options AI Technology:
Bearish - If the stock is going to move lower, based on recent history a big chunk of it would likely to happen on the event. Isolating Friday's expiration here's a trade comparison via Options AI technology for a move to its bearish expected move, to about $124 in the stock:
The 16 wide +140/124 long put spread breaks even at about $133.50 in the stock and it max gain at $124. In contrast, selling to the bulls with the 15 wide -140/+155 short call spread has room up to $145 which seems awfully tight with a risk of $10 to make just $5. Yes it is selling high vol into the event but it's basically binary with expiration just days away and it's unlikely that if the stock goes higher it's by less than $5. The long put spread is high vol but it takes off some of the premium risk by selling the 124 put at about 2.70. It needs a 6.50 move lower just to breakeven though.
Here's the long put spread on the chart, as you can see its targeting the bearish expected move:
From a Bullish perspective it may make sense to buy some time and look out a few weeks. Let's look at some bullish expected move trades out to August 21st expiration:
In this case selling the -140/+120 put spread establishes a breakeven about $8 lower with max gain above $140 in the stock:
And the long +140/-160 call spread chart, breaking even near $147 in the stock: