NFLX EARNINGS PLAY
Updated
NFLX announces earnings on Tuesday 1/19 after market, so look to put on any premium selling play shortly before NY close.
Here are two possible setups, which may have to be tweaked, depending on price movement in the underlying:
Jan 29 80/128 short strangle
Probability of Profit %: 77%
Max Profit: 246/contract
Buying Power Effect: ~$1041
Break Evens: $77.54/$130.46
Feb 5th 75/80/127/132 iron condor
Probability of Profit %: 73%
Max Profit: 103/contract
Buying Power Effect: ~$397
Break Evens: $78.97/$128.03
Notes: I went out a little longer than I usually like with the iron condor, as I had difficulty on the put side getting the strikes (and credit) I wanted for the setup with the Jan 29 expiry. The Jan 29th short strangle is also a little wider than I usually like to go, as there is some "funkiness" with the strikes on the put side (they open up to five bucks apart at the 1 standard deviation line, unfortunately). Look to take these setups off at 50% max profit and redeploy the buying power elsewhere.
Here are two possible setups, which may have to be tweaked, depending on price movement in the underlying:
Jan 29 80/128 short strangle
Probability of Profit %: 77%
Max Profit: 246/contract
Buying Power Effect: ~$1041
Break Evens: $77.54/$130.46
Feb 5th 75/80/127/132 iron condor
Probability of Profit %: 73%
Max Profit: 103/contract
Buying Power Effect: ~$397
Break Evens: $78.97/$128.03
Notes: I went out a little longer than I usually like with the iron condor, as I had difficulty on the put side getting the strikes (and credit) I wanted for the setup with the Jan 29 expiry. The Jan 29th short strangle is also a little wider than I usually like to go, as there is some "funkiness" with the strikes on the put side (they open up to five bucks apart at the 1 standard deviation line, unfortunately). Look to take these setups off at 50% max profit and redeploy the buying power elsewhere.
Note
I think I'm going to go iron condor here; it's early in the earnings season, and I want to preserve a bit of buying power at this point. We've had a bit of a pop this morning, so I've tweaked my setup to a Jan 29 80/85/129/134 iron condor and will look for a 1.04 credit fill for that .... .Note
Filled a Jan 29 80/85/127/132 for a 1.00 credit.Note
Covered for 50% max profit (50/contract).
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