Amazon trade weekly options for income
Amazon amazon trade weekly options for income earnings in just a few days, so I wanted to share my thoughts on the stock and a potential trade for you to consider.
This is an "earnings trade," meaning that it's a more risky kind of setup because of the event risk surrounding the stock. But that's why we are here, right? AMZN comes out with their numbers, and then you have the dingbats who obsessively focus on "earnings per share. I'm telling you, right now, the earnings number doesn't matter.
The way Amazon works is to plow all their money back into the company There's only one area I'm focused on I'm a user, but you also have massive enterprises who use the network. Those numbers are what helped AMZN to clear past 1, last quarter. Amazon has been a massive winner this year. And by this year I mean January. Odds are, a lot of the good news coming out for this earnings report is getting "priced in" the stock. So even if earnings are a beat, or AWS numbers are high, it may not justify new buyers coming in because those that wanted to buy the stock already have.
Jammed higher into earnings, then fade post-earnings. In my opinion, AMZN has a high probability of an underreaction amazon trade weekly options for income earnings. Which is a good thing because we're seeing It's at the highest levels since early Much of this is normal. Earnings risk gets baked into the options market, but think about this It is more sensitive to earnings.
That's a hard sell. Here's a look at the earnings straddle for AMZN:. Market's currently pricing about points of movement in either direction. In a vacuum, that actually seems pretty fair. But given the fact that we've already seen non-reverting volatility, it's a decent trade. This is educational purposes only, I'm not your broker, you are responsible for your own risk management, option risks can be found at the OCC if you want to read about them.
If you've never traded options before, then slowly back away because we're diving into the dark arts. I'm looking at an iron condor.
And here's what the trade looks like real time I like March options because they are further out in time You can try to use weekly options, but if you're wrong then your position gets blown out pretty quickly. The trade is certainly biased a little bit to the upside. That's because the trend is up. I expect equilibrium and more two-sided action post earnings. I recently had a great post-earnings trade in AMZN a month or so back and did a full video analysis to show you how the trade works.
I've put together an Iron Condor Trading Toolkit that gives you the case studies and training needed to be consistently profitable in the market. Click Here to Get the Toolkit. What Numbers to Watch God, it's like this every quarter. AWS is a growth area with super high margins Normally, I would say "high AWS numbers good" but there's something else to consider.
We saw something similar play out a week or so ago in Caterpillar: It's easier for a small company to move big on earnings compared to a big company.
Here's a look at the earnings straddle for AMZN: How to Trade It Amazon trade weekly options for income I start off, let's get this out of the way. Here are the breakevens going amazon trade weekly options for income options expiration: Target profit is about half of the credit, so I want to amazon trade weekly options for income out the spread around 1.
Watch the video below: