The work-oriented social networking company LinkedIn Corp. (LNKD), headquartered in Mountain View, California, publishes earnings on Thursday after the closing bell.
[LNKD in Wikipedia]
I shall use the AUG1 weekly series of options, which trades for the last time eight days hence, on Aug. 7.
Click on chart to enlarge.
|LNKD after the July 29 close, 30 days hourly bars|
|Week||SD1 68.2%||SD2 95%||Chart||Earns|
short the $195 puts and long the $190 puts,
sold for a credit and expiring Aug. 8.
Probability of expiring out-of-the-money
The premium is $1.57, which is 31% of the width of the position’s wings.The stock at the time of analysis was priced at $232.
The risk/reward ratio is 2.2:1.
The zone of profit in the proposed trade covers a $35 move either way. The biggest immediate move after each of the past four earnings announcements was $51.78 and the average was $31.12.
Decision for My Account
I intend to open a position in LNKD as reported above. I'm posting this analyze before the market open, and shall up it if events force change in my plans.
-- Tim Bovee, Fukuoka, Japan, July 30, 2015
My volatility trading rules can be read here.
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Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.License
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