Option Strategies: ZM, TGT& TOL
Hello everyone! Today i want to share some option strategies with you!
1.
Pre-earnings trade idea on: $Target(TGT)$
Earnings date: Wednesday, Aug 21 before market open
Expected move: ~7%
Pre-earnings Trade: Sell-to-open a cash-secured put, Aug 23 expiration, targeting a strike within the 110-120 range ... (could also turn this into a strangle and sell the 170+ naked call strike)
Points To Consider:
- Big gap at the 110 level, which also happens to coincide with strong volume support and point-of-control (based on the timeframe captured in this daily chart)
- 2X the expected move would place downside around the 121-122 level and upside around 165
Post-earnings Trade: Buy-to-close the position if TGT stays above put strike. If the underlying breaches the put strike, then either close for a loss, roll to a lower strike, or take assignment (depending on earnings results and forward guidance). If we sell the call, then we would close the position either way (whether in profit or loss).
2.
Pre-earnings trade idea on: $Toll Brothers(TOL)$
Earnings date: Tuesday, Aug 20 after market close
Expected move: ~5%
Pre-earnings Trade: Sell-to-open a cash-secured put, Aug 23 expiration, targeting a strike within the 109-118 range ... (could also turn this into a strangle and sell the 150+ naked call strike)
Points To Consider:
- Small gap at the 104 level
- Bottom of current volume cluster at 109
- Strongest volume support and point-of-control around 118-119 (based on the timeframe captured in this daily chart)
- 2X the expected move would place downside around the 120 level and upside around 147 (from current price as of this post)
Post-earnings Trade: Buy-to-close the position if TOL stays above put strike. If the underlying breaches the put strike, then either close for a loss, roll to a lower strike, or take assignment (depending on earnings results and forward guidance). Close the call position either way (whether in profit or loss).
3.
Pre-earnings trade idea on: $Zoom(ZM)$
Earnings date: Wednesday, Aug 21 after market close
Expected move: ~8%
Trade Ideas:
- Iron Condor, Aug 23 expiration, sell the 52/50 put & 68/70 call credit spreads
- Strangle, Aug 23 exp, sell the 50 put & 70 call strikes
Points to Consider:
- Expected move places downside to 55 and upside to 64 (as of Tuesday's closing price).
- Volume point-of-control and strong volume resistance around the 68 level.
- Institutions had strongly defended and protected the IPO bottom of $58 ... until now. ZM broke below 58 and traded as low as 55 ... puncturing its IPO bottom.
- ZM has essentially been trading flat for a while (zoom out on the weekly chart), trading in the 58 to 75 range going back to March 2023. 55 is the new bottom of that range.
- Options chain shows a lot of activity at that 55 put with call activity closer to ATM. Need to see if the activity is buying or selling to get a sense if folks are buying ATM calls and selling puts or vice versa.
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