Jul 28, 2016
'Tis the season...earnings season. Instead of avoiding earnings, we are jumping right in, and are going to do so with a long butterfly with calls on GOOG. If you want to follow along with the book, you can find this on page 102.
Today, Brian covers:
- A review of last time, including a mistake we made with the math
- GOOG announces earnings after the close on July 28
- Setting up a butterfly to capture earnings numbers
- What is the most at-the-money straddle in the nearest-term expiration?
- Why do we look at this straddle number?
- What is the outlook?
- Setting up the butterfly
- What kind of move is the market expecting?
- What is our maximum risk? Reward?
- Choosing the 9-day versus the 2-day expiration