We are going to initiate a credit call spread above the market in FDX ahead of their earnings tonight. Options are pricing in about a $19.30 move as of about Noon ET, which is about an 8.3% move.

We are going to absorb some of the premium above the market.

FDX can definitely have some volatility, and it's been a strong stock for good reason, yet the run they've had recently has their stock priced for some pretty amazing numbers and expectations after the bell. Even if they beat expectations tonight, I see FDX having trouble trading up considerably from these levels considering it was just trading under $170 early last month.

There is still a decent amount of premium in the options even when you go as far out as almost 15% above the current stock price.

We are going to risk $9 for every $1 in profit on this trade - so make sure you keep your position small enough to handle the loss in the event that it comes.

We will be risking $450 per contract pair, to make $50. This sounds like a lot of risk, which it is - yet we achieve our max profit as long as FDX does not trade above $265 as of Friday's close, which is almost a 14% rise above the current price.

You can work the price a bit, but don't get less than a $0.45 credit, which would result in about a $10 to $1 risk vs reward ratio.

Sell Sept 18th $265 call.
Buy Sept 18th $270 call.