Facebook Earnings Trade.

ashantt

ashantt

If I am Bullish Facebook going into earnings and plan on holding through them, what trade would the option gurus recommend?

If you could suggest a home run trade as well, I would appreciate.

Thanks.
 
Thanks for the suggestions so far.

But what would be the difference if I purchased front month calls as opposed to selling puts?

Would selling puts be a better hedge or would that be home run trade that returns 10:1 or even 25:1?

thanks.
 
If I were strongly bullish on FB and wanted to play the earnings I would sell the weekly (expire in 11 days) 54 put (4$) buy the 54.5 call (4$) as an syn long. unlimited risk to the downside so "just" in case I was wrong I'd buy the DEC 13 (60 days) 46 put for under $2.

If FB does tank I can roll my short put each week to reduce the potential loss.
 
Quote from ashantt:

If I am Bullish Facebook going into earnings and plan on holding through them, what trade would the option gurus recommend?

If you could suggest a home run trade as well, I would appreciate.

Thanks.
More...

If earnings are October 30.
  • For a bullish trade I recommend a 1-strike OTM weekly Nov1 call option bought October 30 in the last hour of trading.
  • For a home run trade I recommend a 5-strike OTM weekly Nov1 call option bought October 30 in the last hour of trading.
  • Buy maximum you are prepared to lose.
  • Take profits (if any) as soon as possible.

:)
 
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