Apr 27, 2017
It's earnings season again. As such, we're looking at an inverse skip-strike butterfly to capture some earnings move. You can find skip-strike butterflies with calls on page 108, and inverse skip-strike butterflies with calls on page 112 of The Options Playbook, on OptionsPlaybook.com, or on the Amazon Kindle edition.
In this episode, Brian covers:
- A review of last week's AMZN butterfly
- Lesson to learn: Time makes the trade cheaper
- Determining strike prices
- Making sure you do not get blown out
- Looking at the implied volatility
- How to use time premium
- What is the net credit?
- What is the maximum risk?