Dan Bustamante, Instructor
We started earnings season last week with Netflix and continue this week with big names. Bryan Agosto who is a staff member in the Scottsdale office started it off right this week with a $1,700 trade on STX which traded higher today on their earnings report.
Here is the breakdown of the trade:
5 Calls purchased at $1.70 (each call is really $170)
Total Cost: $850
Sell Price: $6.00-$7.00 per strike
This is textbook risk reward here. You will not find this in Forex, Futures or stocks, though we do like to trade them. Earning season usually provides these types of set ups for these risk/reward plays and even with 1 call contract at a cost of $1.70 ($170) your risk is capped. The most you could lose is $170.
I discussed this concept on the radio show last week with Jason and I'll go into more detail about it this week. If you want to learn the basics you can attend a beginners webinar this Wednesday afternoon at 4pm EST.
Click here to sign up.