The Option Strategies for SNOW
Hello everyone! Today i want to share some option stratgies with you!
1.
$Snowflake(SNOW)$ releases earnings after market close on Wednesday Nov 20th. Expected move is ~11% (subject to change leading up to earnings).
We have a long position (shares) on SNOW. Here are our optionselling trades for earnings.
- Sell covered calls at the 150 strike if SNOW stays around the 120-130 range (we are good to be called away)
- Sell covered calls above 150 strike if SNOW trades higher than 135 into Wednesday's close
- Depending on price action movement heading into Wednesday's market close, if there is a steep pump where it looks like the pump is to sell out at a higher price before earnings, then we will go with the 150 strike (or even down to 145 to capture more premium if it looks like earnings might be a dump ... obviously no way to know for sure if it will dump or not)
- Not sure if we want to add to our position, but if we do it would be via selling cash-secured puts at the 105 strike (or lower)
Points to consider since last earnings release:
- 130 gap filled this past week
- Not a lot of volume resistance past 135
- Volume point-of-control at 115(ish) with a consolidation zone in the 110-115 range
- There was a run-up into earnings before it dumped, and the chart is showing similar signs ... could this be another dump for earnings or will SNOW finally release good info that pushes the stock back up 🤔
We don't have a good sense if this will pump or dump for earnings, so won't be buying any options on this trade. You could make money by selling premium, and for that trade we would do the cash-secured puts at 105 or lower strike. Gotta be okay with assignment. If you don't want to be assigned but still want to capture premium, then target a strike 2-3X+ the expected downside move from the trading price before market close on Wednesday.
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