Rocket Equities & Options - Trade Update 08-12-20
New Trade - LYFT earnings tonight after the close
We are going to sell a bull call spread about $2 above the market in Lyft, that will expire this Friday.
This is a trade where we will be risking about $3 to make $1. There is a lot of volatility priced into LYFT coming into earnings tonight. The expected move is $3.07 as of about 11:20 am EST.
We will be selling a $33.00 Aug 14 call at about $0.86.
We will simultaneously be buying the $34.00 Aug 14 call at $0.57.
We will be risking $74 to make $26, so keep your position sized proportionally for a $74 stop per each contract you enter. Our max profit in this trade is the credit we receive when we execute the trades.
Our max profit is achieved if LYFT expires at $33 or below as of Friday. Our max loss is achieved if LYFT expires at $34 or above on Friday.
I don't expect LYFT to have the ability to trade much higher on their earnings, and this is a nice trade to absorb some premium with a negative bias in the stock.
Our risk is about $75 per contract pair in this trade so make your trade accordingly. There is substantial volatility priced into LYFT options right now, and I expect this trade to be profitable more than 75% of the time, which is all we need in the long run.
This is a trade where we will be risking about $3 to make $1. There is a lot of volatility priced into LYFT coming into earnings tonight. The expected move is $3.07 as of about 11:20 am EST.
We will be selling a $33.00 Aug 14 call at about $0.86.
We will simultaneously be buying the $34.00 Aug 14 call at $0.57.
We will be risking $74 to make $26, so keep your position sized proportionally for a $74 stop per each contract you enter. Our max profit in this trade is the credit we receive when we execute the trades.
Our max profit is achieved if LYFT expires at $33 or below as of Friday. Our max loss is achieved if LYFT expires at $34 or above on Friday.
I don't expect LYFT to have the ability to trade much higher on their earnings, and this is a nice trade to absorb some premium with a negative bias in the stock.
Our risk is about $75 per contract pair in this trade so make your trade accordingly. There is substantial volatility priced into LYFT options right now, and I expect this trade to be profitable more than 75% of the time, which is all we need in the long run.