Posted in
Current Events
By: Tom Gentile
on February 4th, 2022
What Meta Platforms, Inc. Taketh Away, Amazon.com, Inc. Giveth
Sure, Snapchat and Pinterest reported earnings today, but in regard to how well their stock price performance affects the markets, it pales in comparison to what the Amazon stock price performance can do to or for the markets.
AMZN reported 4th Quarter earnings of $27.75 per share on revenue of $137.4 billion. Expectations were for it to report $3.89 per share on revenue of $137.7 billion. Revenue grew 9.4% on a year-over-year basis.
This saw the stock rocket higher and close by a bit over 375 points or up +13.54%
An Interesting Option Strategy Consideration for Amazon
I offer the same education on IV today on AMZN as with yesterday’s with Meta, but with a Twist:
Usually after a company announces earnings there is a drop in the Implied Volatility (IV) of their options.
This time, likely due to the earnings miss and poor next quarter guidance, volatility hasn’t dropped off that much.
The Twist:
Instead of buying options with high IV one can consider selling that high IV in the form of a Put Credit Spread.
Assess a price point with a short-term expiration, like in a couple of weeks or less, and price out selling to open a strike with that price you don’t think it will hit in a couple of weeks or less and Buy to Open on the same order ticket a strike with the same month’s expiration just above that and see if the potential ROI looks appealing to you.
App: Toms Option Tools
Toms Option Tools scan the markets for bullish and bearish trade opportunities using our proprietary scans and strategy algorithms. TTR Darknet finds bullish entries based on triple stack channel collisions. Money Calendar identifies seasonal patterns with at least 90% accuracy looking back 10 years. Weekly Cash Clock finds short term opportunities that last a week on average. Microcurrency Trader applies Darknet technology and moving averages to cryptocurrencies. Velocity Trader utilizes volume spike and Velocity indicators on custom stock lists. Quantum Scripts scans the markets for momentum acceleration signals and employs Quantum noise filters. Optimal Trader finds directional pre-earnings opportunities that are optimized for entry date, stock movement, and volatility surge. My Trades tracks the profit/loss of your trades, displays stock charts and risk graphs, creates new trades, and edits existing trades. Morning Report provides top 10 option rankings in 6 categories each day.
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