This is going to be a very quick post with a trade idea for Amazon.com (AMZN). They had their earning yesterday and they beat and raised guidance. However, the stock as of this writing is at 128.61 in pre-market. I would not do this trade until the price settled down after the open and indicated what direction it might move, if it’s any direction at all.
Below is a risk analysis and my chart showing the green profit zone for the trade. If the stock moves either up or down, all you have to do is move the Put and Call prices to keep the current price around the middle. The play as I have indicated is to buy a Double Calendar -FEB/+MAR 125 Put/140 Call. The trade’s debit is currently at$308 with a profit potential of over $480 for the maximum (between the two tent poles).
In my mind this is a high probability trade, but I won’t be doing anything until I get a firm confirmation this morning on what the price is going to do. If this trade works out, I will exit the week of expiration.
- Jeff
