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
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.
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