Option Strategies: ADBE

Selling For Premium

Hello everyone! Today i want to share some option strategies with you!

1.

Liking this pre-earnings optionselling trade idea on $Adobe(ADBE)$ . Haven't done a jade lizard in a while. This is a neutral/slightly bullish strategy. Read below for details.

▫️ STO Jan 17 25 expiration, 470 cash-secured put & 550/555 call credit spread

The 470 put strike is the most recent bottom as well as a previous gap level. Looks like a solid strike to target for assignment, although we'd feel more comfortable at the 435 strike.

The 550/555 call credit spread is essentially ATM, but it does look like ADBE might be setting up for a post-earnings drop as it has pumped up leading into earnings and profit-taking sell-offs on tech seem to be the norm right now. The OP probably picked those strikes for these very reasons.

The ideal outcome is for the underlying's price at expiration to be between 470 and 550, allowing the options to expire worthless so that we get to keep the premium earned.

If ADBE breaches 550 and stays above by expiration, then we are hedged at 555 but also have captured more than 5.00 in premium on the trade, thus eliminating upside risk.

If ADBE breaches 470, then we take assignment or roll down-and-out to lower entry price (strike) or close for a loss if underlying stays below 470 minus premium received on the initial trade.

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Comments

股勇者
12-11
股勇者
not really a good setup though

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Today i want to share some option strategies with you!</p><p></p><p>1.</p><p>Liking this pre-earnings optionselling trade idea on  <a data-mention-id=\"ADBE\" class=\"teditor-mention\" data-mention-name=\"Adobe\" href=\"https://ttm.financial/S/ADBE\">$Adobe(ADBE)$</a> . Haven't done a jade lizard in a while. This is a neutral/slightly bullish strategy. Read below for details.</p><p>▫️ STO Jan 17 25 expiration, 470 cash-secured put &amp; 550/555 call credit spread</p><p>The 470 put strike is the most recent bottom as well as a previous gap level. Looks like a solid strike to target for assignment, although we'd feel more comfortable at the 435 strike.</p><p>The 550/555 call credit spread is essentially ATM, but it does look like ADBE might be setting up for a post-earnings drop as it has pumped up leading into earnings and profit-taking sell-offs on tech seem to be the norm right now. The OP probably picked those strikes for these very reasons. </p><p>The ideal outcome is for the underlying's price at expiration to be between 470 and 550, allowing the options to expire worthless so that we get to keep the premium earned. </p><p>If ADBE breaches 550 and stays above by expiration, then we are hedged at 555 but also have captured more than 5.00 in premium on the trade, thus eliminating upside risk.</p><p>If ADBE breaches 470, then we take assignment or roll down-and-out to lower entry price (strike) or close for a loss if underlying stays below 470 minus premium received on the initial trade.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/dbffb58b51b460e3f2c900fdb78befa0\" tg-width=\"1273\" tg-height=\"956\"></p><p></p><p><em>Follow me to learn more about analysis!!</em></p></body></html>","htmlText":"<html><head></head><body><p>Hello everyone! Today i want to share some option strategies with you!</p><p></p><p>1.</p><p>Liking this pre-earnings optionselling trade idea on  <a data-mention-id=\"ADBE\" class=\"teditor-mention\" data-mention-name=\"Adobe\" href=\"https://ttm.financial/S/ADBE\">$Adobe(ADBE)$</a> . Haven't done a jade lizard in a while. This is a neutral/slightly bullish strategy. Read below for details.</p><p>▫️ STO Jan 17 25 expiration, 470 cash-secured put &amp; 550/555 call credit spread</p><p>The 470 put strike is the most recent bottom as well as a previous gap level. Looks like a solid strike to target for assignment, although we'd feel more comfortable at the 435 strike.</p><p>The 550/555 call credit spread is essentially ATM, but it does look like ADBE might be setting up for a post-earnings drop as it has pumped up leading into earnings and profit-taking sell-offs on tech seem to be the norm right now. The OP probably picked those strikes for these very reasons. </p><p>The ideal outcome is for the underlying's price at expiration to be between 470 and 550, allowing the options to expire worthless so that we get to keep the premium earned. </p><p>If ADBE breaches 550 and stays above by expiration, then we are hedged at 555 but also have captured more than 5.00 in premium on the trade, thus eliminating upside risk.</p><p>If ADBE breaches 470, then we take assignment or roll down-and-out to lower entry price (strike) or close for a loss if underlying stays below 470 minus premium received on the initial trade.</p><p></p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/dbffb58b51b460e3f2c900fdb78befa0\" tg-width=\"1273\" tg-height=\"956\"></p><p></p><p><em>Follow me to learn more about analysis!!</em></p></body></html>","text":"Hello everyone! Today i want to share some option strategies with you! 1. Liking this pre-earnings optionselling trade idea on $Adobe(ADBE)$ . Haven't done a jade lizard in a while. This is a neutral/slightly bullish strategy. Read below for details. ▫️ STO Jan 17 25 expiration, 470 cash-secured put & 550/555 call credit spread The 470 put strike is the most recent bottom as well as a previous gap level. Looks like a solid strike to target for assignment, although we'd feel more comfortable at the 435 strike. The 550/555 call credit spread is essentially ATM, but it does look like ADBE might be setting up for a post-earnings drop as it has pumped up leading into earnings and profit-taking sell-offs on tech seem to be the norm right now. The OP probably picked those strikes for these very reasons. The ideal outcome is for the underlying's price at expiration to be between 470 and 550, allowing the options to expire worthless so that we get to keep the premium earned. If ADBE breaches 550 and stays above by expiration, then we are hedged at 555 but also have captured more than 5.00 in premium on the trade, thus eliminating upside risk. If ADBE breaches 470, then we take assignment or roll down-and-out to lower entry price (strike) or close for a loss if underlying stays below 470 minus premium received on the initial trade. 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