To The Moon

Focus on AMD and SNAP earnings options move.

AMD's answer is a simple one. Three features are obvious. Earnings will fall, $68 price target.

Focus on AMD and SNAP earnings options change.

AMD's answer is a simple one. Three features are obvious. Earnings will fall, $68 price target: $AMD 20230203 68.0 PUT$ $AMD 20230203 68.0 PUT$ 

All three of these features should be known to veteran players. If you don't come to a conclusion, you can think about it. I will publish the answer tomorrow. (A word of caution: this is not 100% correct. It's risky to bet on earnings.)

SNAP has more options strategies, so the direction is less clear. But I immediately saw a pair of particularly outrageous earnings trading strategies:

• buy ​$SNAP 20230203 13.0 CALL$ $SNAP 20230203 13.0 CALL$ ​
• sell ​$SNAP 20230203 14.5 CALL$ $SNAP 20230203 14.5 CALL$ 

At first glance, it looks like a plain old call spread strategy: buy a shallow out-of-money call, sell a deep out-of-money call.

When SNAP shares rise near or above $13 but below $14.50 after earnings, the trader will double his profit by buying the call, plus a premium for selling the deep out-of-the-money option call.

The trader is betting on SNAP rising between 18% and 32%.

And when SNAP rose below $13 after the earnings report, in general, the depth of the out-of-the-money call‘s premium hedge the game cost of buying the call.

What matters is the total amount of transactions in this strategy.

The total amount of $SNAP 20230203 13.0 CALL$  bought is $360,000, and the premium of $SNAP 20230203 14.5 CALL$  sold is exactly $360,000. That means SNAP is up less than 18%, including a big drop, and the trader is only losing a small fee.

It's the first time I've met such a budget-conscious financial player.