Thursday, July 26, 2012

$AMZN put calender for earnings

27july- the trade looked good for all of about 5minutes after earnings were released, the street apparentaly giving AMZN a pass for not making any money and having a 200+ PE.. i will now let the weekly put expire worthless and hold the Aug195put which is worth about 50cents now, stock is up 13 so far today. could just as easy be down that much tomorrow.. 3 weeks to go till aug opex and if stock moves down a bit the Aug195put might get a bump to my breakeven which is what i paid for it.


26july-i have not been in AMZN the entire quarter. the huge gap from last earnings kept me out of any newcredit put spreads. with earnings tonight im making a low premium bearish trade.. the IV for the weeklies is 180ish..that nuts.. that also makes calender spreads a good bet if you get the direction right..options also pricing in about a 20dollar bet would be bearish move..margins, europe, whatever... my assumption when i look at price moves is that the options market has the move priced in pretty well.. so about at 20move when i put this on earlier during the twitter monthly outage gets the stock to about 195ish... although way outside of the bollinger band, the 195 level lines up nicely with the gap fill level from previous earnings..
   so im doing the weekly/Aug 195 put calender
Sell the weekly 195 puts
Buy the Aug 195 puts for 1.35 per lot..

not alot of premium to outlay.. risk less to make more.. Trademonster analyse tab shows this trade has a 7 to 1 payout ratio which is pretty good for a calender.

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