Tony Zhang Explains How To Use Options To Play Earnings Season

Tony Zhang looks at NFLX before earnings after the stock has been weak on a relative strength basis compared to industry group peers. He sets up a compelling neutral to bearish thesis on the company before earnings after the bell. When considering the high implied volatility priced into options, Tony uses a short call spread sold for a generous credit. This trade meets his neutral to bearish bias. It is a defined risk and return setup, and avoids the costly premium associated with buying bearish puts outright.

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21 Apr 2021

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Tony Zhang Explains How To Use Options To Play Earnings Season

Tony Zhang looks at NFLX before earnings after the stock has been weak on a relative strength basis compared to industry group peers. He sets up a compelling neutral to bearish thesis on the company before earnings after the bell. When considering the high implied volatility priced into options, Tony uses a short call spread sold for a generous credit. This trade meets his neutral to bearish bias. It is a defined risk and return setup, and avoids the costly premium associated with buying bearish puts outright.

Market On Close

21 Apr 2021

ON AIR
7:00 am
Market Overtime
replay

Get Market Minute

Daily insights for every investor

FOLLOW US