Option Strategies: KMX
Hello everyone! Today i want share some option stratgies with you!
1.
$CarMax(KMX)$ releases earnings on Friday this week. We are contemplating taking a pre-earnings trade.
Earnings Date: Friday, June 21, before market open
Expected Move: ~10%
Points to Consider:
- Currently trading around volume point-of-control and strong volume support dating back to fall 2023
- Trading within multi-year range of 55-88
- Trading below 200EMA of 73
- 2X the expected move places downside target at 57 and upside target at 86
- Premiums are not that enticing at the 55 or 90 strike
- There are no strikes at the 57 and 86 level ... the 85 call strike has decent premium and is close to the 86 target, but for the put strike we would have to move up to 60 to get decent premium as the 55 strike is not much
- Options OI shows folks most interested in essentially ATM calls and puts at the 60 strike
Trade Idea: If we take a trade, it would be to sell an Iron Condor before earnings
- June 21 expiration, 60/55 put credit spread & 85/90 call credit spread. PoP (probability of profit) for this trade is 82%.
Note: All data as of Tuesday's close. Subject to change on Thursday before market close.
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